May brought news that trucking prices are hauling upward, and fast. Increased hauling costs often mean a noticeable uptick in price tags for the many goods those trucks deliver. This was a bad omen for Republicans — rising prices have historically complicated things for the party in power during midterm elections.
For instance, 2022 was a year of significant inflation in hauling and other sectors of the economy. It was also pretty bad for Democrats, who controlled Congress and the White House at the time. Then-President Joe Biden’s party lost nine seats and control of the House that year — not a political tidal wave as many pundits predicted, but a defeat nonetheless.
A bit under six months out from the 2026 elections, trucking prices suggest a troubling economic picture for Republicans. The Logistics Managers’ Index for April was at the root of many bearish stories. The index showed several indicators that hauling costs are rising at an accelerating rate.
“Freight markets were already on a strong upward trajectory coming into 2026,” a group of supply chain management professors who compile the index said in a statement. But this was something else: “The closure of the Strait of Hormuz and subsequent increase in fuel costs have supercharged these movements.”
The LMI team called the increases “good news for carriers in the near-term” but expressed some confusion about what these indicators will mean over the long haul.
The supply chain professors have received reports that firms are building up inventories in warehouses as they “consolidate shipments to avoid transportation surcharges.” As we might expect, the percentage of warehouse utilization is climbing toward full capacity, and the price of renting warehouse space is increasing.
Stepping on the gas
The main driver accelerating hauling costs is the war-driven worldwide spike in the price of gas. Demand hasn’t budged much. Supply is constrained by the on-again, off-again blockades and agitation in the Strait of Hormuz, as well as by Ukrainian attacks on Russian oil capacity.
Because of these constraints, gasoline continues to rise at the pump, with the national average at $4.43 per gallon at press time. It was much higher in many states, and lower in a few others. Californians paid the highest prices, at $6.08 a gallon, while Oklahomans paid “only” $3.94.
The AAA index, from which those figures emerge, logged 25-cent increases in gas for two straight weeks, which triggered much grumbling among motorists. Many voters have learned to treat the pump price as a proxy for tracking inflation. They are thus especially price sensitive in this area.
Partly for this reason, the Biden administration sold 180 million barrels from the U.S. Strategic Petroleum Reserve in 2022, according to the Energy Information Administration. That significant sell-off leading up to the midterm elections may have salvaged a few Democratic House seats.
The second administration of President Donald Trump took notice of that move. It is looking to do roughly the same thing domestically and has announced that other nations will chip in as well.
Energy Secretary Chris Wright said in March that the “32 member nations of the International Energy Agency unanimously agreed to President Trump’s request to lower energy prices with a coordinated release of 400 million barrels of oil and refined products from their respective reserves.”
Under the current plans, that will eventually include 172 million barrels from America’s own reserve. The dispersion has already begun and will continue over a 120-day period.
Wright added that the government plans to “more than replace these strategic reserves with approximately 200 million barrels within the next year — 20% more barrels than will be drawn down,” and contrasted this positively with the Biden administration’s action, “which left America’s oil reserves drained and damaged.”
Trump has also expressed support for suspending the federal gas tax, of 18.4 cents per gallon on most gas and 24.4 cents per gallon on diesel, until the current crisis abates. Sen. Josh Hawley (R-MO) intends to introduce legislation to do just that.
North of the border, at the behest of Liberal Prime Minister Mark Carney, Canada has already suspended its national gas tax until Labour Day, extra “U” and all.
Five-year high coming
The average price of a gallon of diesel was $5.55 at press time. That is much more consequential for the economy as a whole than the price of regular unleaded, because most delivery vehicles run on diesel.
To the greatest extent possible, trucking firms pass off increased diesel prices to their customers through surcharge fees and, ultimately, higher contract rates. Thus, increased pump prices can mean higher sales prices on everything from bread to shoes to construction supplies to computers.
The “steepest one-way rate increases since 2021” were trucking toward consumers, announced the supply chain trade publication FreightWaves in early May. Large logistics firm Schneider National, with over 8,000 trucks on the road, was heading into contract renewals season “planning on mid- to high-single-digit one-way contract increases, with double-digit hikes lined up for transactional shippers, citing the strongest pricing environment in five years.”
Moreover, that move by one large company represented “the floor for one-way bid season, not the ceiling.” The trade journal advised companies that wanted to move a significant amount of product on trucks to “lock in capacity with high-acceptance carriers now” or be prepared to pay more later.
Rail to the rescue?
The chief competitor to trucking in America is the railroads, with their privately maintained freight rail networks that outpace competitors in most nations. Increased diesel costs can boost engine operating costs, of course, but steel-on-steel is much more efficient than tires-on-pavement.
Could the railroads add more cars or more trips to offset, at least partially, the rise in hauling prices?
For a report issued in December 2025, the Association of American Railroads looked at a great deal of data and concluded that rail’s “distinctive cost structure and operating model — capital-intensive, long-haul, and energy-efficient — make it less prone to volatility and faster to recover from shocks. In economic terms, rail functions as a built-in shock absorber within the nation’s logistics system.”
That good news comes with a few important caveats, however. First, because of the way rail contracts are structured, it takes a while for them to ramp up capacity for new customers. Second, the so-called “last mile” problem remains.
Once trains have moved the goods to a given locale, those goods generally have to be offloaded and loaded into delivery vehicles, usually trucks, with their recently increased costs, to get the goods to the wholesalers, retailers, and, ultimately, consumers.
Texas gold lining
That increased delivery costs contribute to price hikes on a large scale is hard to contest.
In a 2022 paper in the Journal of International Money and Finance, several economists from the International Monetary Fund, Georgetown University, and the University of Palermo tackled the big issue of international shipping and local prices. They found that “increases in global shipping costs have non-negligible, persistent, and statistically significant effects on domestic inflation.” That result would also apply to domestic shipping in nations with large internal economies, including America.
Still, there could be a lining to this dark cloud, made not of silver but Texas gold.
Philip Rosetti is an energy policy analyst with the R Street Institute. He contrasted past oil shocks that caused significant pain for the U.S. economy with the current shock, which may not be as painful. The United States now produces a great deal of oil domestically, due to increased drilling and an oil shale boom.
“We have usually been on the receiving end of the pain,” Rossetti told the Washington Examiner. “Now we’re getting some offsetting from our own production.”
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The gains are spread out unevenly, Rossetti said, with states and regions that don’t produce oil experiencing fewer benefits to offset the rising transportation and other costs. He also pointed out that as the price of oil continues to rise, more domestic production will come online.
“The oil-producing areas are going to fare better, but there might be a net increase in investment across the economy,” he said, then cautioned, “but that is a more long-term thing.”
Jeremy Lott (@jeremylottdiary) is the author of several books, most recently The Three Feral Pigs and the Vegan Wolf.