Will Trucking Remain Strong In Light of Gas Prices?

The trucking industry has been on a roller coaster the last few years. The question now is whether trucking will remain strong in light of gas prices going up, up and up. 

After reading this article, I would encourage you to take a look at a concept known as peak oil in relation to the future of the trucking industry. Oil is a finite resource. There is only so much of it out there. This is why we see exploration wondering off land and out into the deep sea environment. 

Regardless, the basic idea behind peak oil is we will reach a period when the world will be able to produce the maximum number of barrels of oil a day that it ever will be able to do so. After that, the production rate will drop slowly but surely like the downward slope of a hill. As this happens, prices will shoot up. 

Many people believe we are now facing peak oil. Oil industry experts like Colin Campbell have suggested that when peak hits, we will see economies go into deep recession after deep recession as prices shoot up and then down. This appears to be what is happening now. 2008 saw a brutal recession, the Great Recession if you will. We are slowly recovering and with that recovery comes an increased demand for oil. Given the lack of spare capacity, we now see oil and gas prices going back up. I’m in San Diego and am paying $4.30 for premium. $5 is just around the corner as more people begin driving in the summer. 

The question is how high does the price have to go before the economy collapses again? It was about this level when things went haywire last time. Will this happen again? It certainly seems like history is repeating itself and in a very short period of time. 

What does this mean for the trucking industry? It means a brutal business environment where business demand falls and cost of operating goes through the roof. If you are a trucker, that doesn’t mean much in the way of job security. Even huge truckers like YRC can’t take another hit. I hope it isn’t the case, but one gets the feeling chaos is just around the corner. 

Prepare yourself. Make sure you have alternatives in place.