Newsletter · 2026-09-29 · Ashutosh Agarwal

Diesel Sets a Third Record as Freight Shifts From Truck to Rail - Freight Cycle Weekly - Week of September 29, 2026

Freight Cycle Weekly for the week of September 29, 2026. Podcast synthesis on diesel's third straight record at 6.599 dollars a gallon while crude fell below 100 dollars, the refining shortfall behind it, the White House diesel export-ban whipsaw, rail volumes snapping back and truck-to-rail conversion, the STB warning shot on Union Pacific and Norfolk Southern, a tight but flat truckload market, the fuel-surcharge squeeze on small carriers, and Aurora's autonomous-truck targets.

Freight Cycle Weekly

Week of September 29, 2026: Diesel Sets a Third Record as Freight Shifts From Truck to Rail

Diesel went up again last week. That makes three record highs in a row.

But here is the part that caught my attention. Oil got cheaper last week. U.S. crude fell below $100 a barrel for the first time since September 9. And diesel still climbed another 24 cents.

That gap tells you nearly everything about this market right now. The world has plenty of crude oil. What it doesn't have is enough refineries to turn that oil into diesel. So the fuel that moves every truck, train, tractor and tugboat in America keeps getting more expensive, even while the headline oil price cools off.

Last week I said the big question was whether $6 diesel would start to hurt freight demand, and not just carrier costs. This week's podcasts gave a clear answer to a slightly different question. Demand is still flat. But shippers are changing how they move freight. More of it is going onto trains. Rail volumes snapped back hard after last week's scare. And every railroad, intermodal company and Morgan Stanley analyst who spoke this week was talking about the same thing: truck-to-rail conversion.

Meanwhile, the trucking market itself is stuck in what FreightWaves' Zach Strickland called "a very fragile state of being." Capacity is still tight. Rates are still high. And nobody can point to much demand behind it.

TL;DR

• Diesel hit $6.599 a gallon, its third straight weekly record, up $2.63 (about 68%) since early March. Crude fell below $100. The problem is refining, not oil.
• Rail bounced back fast. North American rail traffic rose 4.6% from a year ago in week 37. U.S. intermodal (containers moving by train) jumped 6.9%. Last week's "first decline since February" looks like Labor Day noise.
• Truck-to-rail is the theme of the week. BNSF says this is "an era of intermodal," not a seasonal blip. Morgan Stanley's commodity chief heard U.S. railroads talk about truck-to-train switching at "very high levels."
• Trucking is tight but not growing. About 14% of contract loads are still being turned down by carriers, which is far above last year. But tender volume is "still not above where we were in April." Capacity is doing the work, not demand.
• The spot market flipped. Flatbed rates posted their biggest jump for this week of the year since at least 2008. Van and reefer rates slipped.
• Carriers are losing the fuel race. Fuel is rising faster than spot rates. Old fuel-surcharge formulas leave small carriers short by 20 to 40 cents a mile.
• The UP–Norfolk Southern merger got a warning shot. Regulators let the application proceed, but one board member called it "shallow."
• The diesel export ban is a live whipsaw. President Trump says he is considering it "very seriously." His Energy Secretary is against it. One Piper Sandler strategist thinks it could cut pump prices by $1 to $2 in the short run.
• Is this the top? Phil Flynn of the Price Futures Group thinks "diesel prices may have topped." Others see $300-a-barrel diesel as possible. Nobody knows.

What's New

1. Diesel: Three Records in a Row, While Oil Falls

The numbers. On FTR's weekly trucking podcast (FTR | State of Freight, ep. 383, Sep 22), Avery Weiss, FTR's VP of Trucking, laid it out:

• National average diesel rose 24.4 cents to $6.599 a gallon in the week ended September 21. That's the third record week in a row.
• It is up 93 cents in three weeks and $1.95 in eleven weeks. Weiss's aside: that eleven-week jump alone is "more than the total price of diesel ever before September of 2004."
• Since the start of March, diesel is up $2.63, about 68%.
• Every region of the country is now at an all-time high. New England and the Central Atlantic were the last to join.

And the part that matters most: U.S. crude futures closed below $100 on Monday, September 21, down about $10 in four trading days. It didn't help.

"Even if crude prices were to keep falling, that's no guarantee of major relief in diesel prices, because the bigger issue ... is the fact that diesel supply is short." (Avery Weiss, FTR)

Weiss also flagged that U.S. ultra-low-sulfur diesel stockpiles are 9% below the same week of 2022. That was the last diesel crisis. You have to go back to 2008 to find stocks meaningfully lower for this time of year. And two seasonal hits are coming: farmers are running combines for harvest, and the Northeast is about to start buying heating oil, which comes from the same pool of fuel.

Why oil and diesel came apart. The clearest explanation this week came from Martijn Rats, Morgan Stanley's head of commodity research, on Thoughts on the Market ("The Global Diesel Problem," Sep 24). His math:

• The world's refineries normally process about 85 million barrels of crude a day. Right now, about 4 to 5 million barrels a day of that capacity is offline. Half is in the Middle East, stuck behind the closed Strait of Hormuz or damaged. The other half is in Russia, knocked out by Ukrainian drones.
• About 40% of what those refineries make would be diesel. So the world is missing roughly 1.5 million barrels a day of diesel. That comes out of a global seaborne (ship-traded) market of only about 8 million barrels a day.
• The "crack spread" is the extra price diesel fetches over the crude it's made from. It's basically the refiner's markup. It normally sits around $20 a barrel. In a strong market it's $25 to $30. In the 2022 crisis it peaked at $60 to $70. It is now about $100. That puts diesel above $200 a barrel, an all-time high.

Why don't refiners just make more diesel? Rats explained that you can't. A refinery's product mix is basically fixed when it's built. Every refinery that can run is already running flat out. As host Andrew Sheets put it, "You can't just turn a big dial that says more diesel."

On the HC Commodities Podcast (Sep 22), the Doomberg guest made the same point in plain terms: crude is sitting around $100 and is "relatively well-managed," so the shortage is in the refineries, not in the oil.

How bad is the Russia piece? Energy analyst Rory Johnston told CBC's Cost of Living (Sep 25) that Ukrainian drones have hit Russian refineries about once every three days this year. Only 5 of Russia's 32 major refineries haven't been hit. His worst case is the scary one:

"I can see a situation where crude falls back to 80 and diesel goes to 300. I think that's an entirely viable scenario here." (Rory Johnston)

Has it peaked? Not everyone thinks it gets worse. On FreightWaves' Brake Check (Sep 22), Phil Flynn, senior market analyst at the Price Futures Group, came in with a call:

"It looks like diesel prices may have topped. So everybody out there, cross your fingers. And if you can't do that, cross your toes."

His reasons: the Romeoville, Illinois refinery that caused the last Midwest spike is coming back online. Chinese refiners are exporting again because $100-a-barrel margins are too good to pass up. And there is talk of a Russia–Ukraine pause on energy strikes. Would diesel hit $7? "Possibly. Not likely." His summary line: "We have plenty of oil. We don't have plenty of diesel." Flynn also noted, fairly, that everyone screaming "it'll never stop" is usually when it stops.

On the ground, it doesn't feel like a top yet. Brad Hackett, who runs recruiting and safety at the 30-truck carrier Jet Express, told Brake Check (Sep 24): "I saw $7.37 diesel here in Indianapolis this week."

2. The Export-Ban Whipsaw

Last week, a U.S. ban on diesel exports was a debate. This week it became a policy fight inside the White House.

Jim Wiesemeyer on AG Bull ("Wiesemeyer's Perspectives," Sep 28) called it an "etch-a-sketch energy policy":

• President Trump first said he favored a ban.
• Energy Secretary Chris Wright pushed back. He warned it could raise gasoline and jet fuel prices.
• Senator Ted Cruz told refining lobbyists he had White House assurances there would be no ban.
• Then on Sunday, Trump said he was considering it "very seriously."

The politics are clear. Wiesemeyer says the administration's internal polling in farm-belt states shows "very negative reaction" to diesel prices. AgDay (Sep 22) put the pain at more than $2.50 a gallon above last year for farmers and truckers.

Would a ban work? The best two-sided take came from Jan Stuart, global energy strategist at Piper Sandler, on the Columbia Energy Exchange (Sep 25):

• In the short run, yes, probably. Keeping about 1.5 million barrels a day of diesel at home could push retail prices "down by probably a dollar or two from $6.50 to maybe $4.50." (That only holds if the government keeps waiving the Jones Act, the law that says only U.S. ships can move goods between U.S. ports, so fuel can reach the coasts.)
• In the long run, it backfires. Once storage tanks fill, refiners have to cut runs. That means less gasoline and jet fuel too. Morgan Stanley's Rats made the same point: in the U.S., a diesel export ban "could lead to higher gasoline prices."

Stuart also had the best wry line of the week. He says about 25% of today's inflated diesel price comes from tanker shipping costs alone: "25% of the silliness in diesel prices can be laid at the feet of the tanker owners." On the timing, he was blunt. If the goal is to swing the midterms, the time to act is "six to four weeks out," which is right now.

Phil Flynn is firmly against a ban. He called it "extremely damaging to the trucking industry," because other countries would retaliate in kind.

3. Rail Snapped Back, and Truck-to-Rail Became the Story

Last week, rail looked like it was rolling over. Week 36 showed the first year-over-year drop in North American rail traffic since February. Autos were down 19%.

This week it reversed. From FreightWaves Today (Sep 24), for week 37:

• Total North American rail volume: +4.6% year over year
• U.S. intermodal: +6.9%
• U.S. carloads excluding coal and grain (the "industrial economy" read): +6.3%

That's a big swing, and it strongly suggests last week's dip was a Labor Day calendar quirk.

More important is why intermodal is growing. "Intermodal" means a container that rides on a train for the long middle stretch and a truck for the short ends. It uses a fraction of the fuel of a truck going the whole way. With diesel at $6.60, that difference is suddenly huge.

BNSF says this is structural. On Talking Transports ("BNSF Sees an Era of Intermodal Growth," Sep 22), a BNSF intermodal executive said the goal is to turn this from "situational or seasonally an intermodal moment to really an era of intermodal." Some specifics:

• A new daily Phoenix–Dallas/Fort Worth service running "just over three days," about a day faster than before. It targets data-center and industrial freight between two fast-growing metros.
• Inbound demand: "the last six months there's more calls coming in than were the last couple of years."
• BNSF has a dedicated team whose only job is converting shippers from truck to rail.

The data backs it up. On FreightWaves Today (Sep 23), SONAR showed long-haul truckload volume falling while outbound rail container volume is up 6% year over year. The average truck trip is getting shorter, because the long legs are moving to rail. On the Sep 22 episode, intermodal contract rates were $1.73 a mile, up about 8% from a year ago, "as we're continuing to see more volume move from the roads to the rails."

And from Morgan Stanley's Rats, who covers oil, not railroads:

"Some of the train companies in the United States were talking about a truck to train substitution of very high levels of cargo loads on trains because simply the diesel on trucks is too expensive."

That is what economists call demand destruction. People don't stop shipping. They switch to the cheaper option. For trucking, that's a real volume leak. For railroads, it's a gift.

4. The UP–Norfolk Southern Merger Got a Warning Shot

The Surface Transportation Board (STB) is the federal regulator that approves railroad mergers. On Friday, September 18, it declined to throw out the Union Pacific–Norfolk Southern application, as BNSF, CSX and a group of shippers had asked. So the review goes ahead.

But there was a sting. Board member Richard Kloster, a Trump appointee, wrote a separate opinion calling the application "shallow." He said it lacks detail on how UP would handle competition concerns and offers no meaningful concessions. That's notable because UP CEO Jim Vena appeared with President Trump in the Oval Office in September, and Trump called the deal a good idea. (FreightWaves Today, Sep 24)

FreightWaves' Julie Van de Kamp was less impressed. She pointed out that Kloster still voted with the rest of the board: "I don't know that it really means anything."

The two sides this week:

• For (sort of): Schneider. CEO Jim Filter, speaking from Green Bay on the same episode, pointed to the CPKC merger as proof these deals can work. There, Schneider was "absolutely convicted that this is going to reduce transit time, improve reliability and take out cost. It's the trifecta." On UP–NS: "What if you could go around [Chicago]? ... this is the first really big opportunity that we've seen that you could do that." Schneider hasn't taken a formal position.
• Against: BNSF. The BNSF executive on Talking Transports said there is "no concession scenario, no remedy scenario that actually is in the public interest." BNSF's sharpest point: the merged company is projecting 12% growth over three years, yet it "has shrank by 13 percent over the last decade." BNSF also argues shippers already have four coast-to-coast rail options, and the merger would "cut in half" that choice. It notes the fastest train in North America today is a BNSF–CSX run from Los Angeles to North Bergen, New Jersey.

5. Trucking: Tight, Fragile, and Not Growing

The truckload market barely moved this week. The data tells a story of shrinking supply, not rising demand.

Tender rejections. When a shipper offers a load to a carrier under contract and the carrier says no, that's a "tender rejection." A high rejection rate means carriers have better options, like the spot market (one-off loads priced on the day). Rejections were 14.55% on September 22, 14.21% on the 23rd, and "around that 14% range" on the 28th. That's versus about 5.5% a year ago.

On FreightWaves Today (Sep 25), Zach Strickland said the latest bump back toward the Labor Day peak has "not a lot of reasoning behind this explainable in the demand side":

"This is really still just a very fragile state of being ... any sensitivity that we have today is really being driven by the fact that capacity is just really constrained." (Zach Strickland, FreightWaves)

Two details stood out. First, dry van rejections are rising the most. That matters because vans carry 60% to 70% of all U.S. truck freight, and "this is not a seasonal influence." Second, the pressure is concentrated in the Midwest corridor: Columbus, Allentown, Elizabeth (New Jersey) and Joliet.

Demand is flat. Tender volume (how many loads shippers are offering) is "still not above where we were in April," per Strickland. On Sep 28, Van de Kamp described an "elongated and stable peak" and said there's "not a lot of movement in the data."

Why capacity keeps shrinking. Schneider's Jim Filter gave the best big-picture account (FreightWaves Today, Sep 24):

"It was unusual to see 50,000 long haul drivers enter a marketplace over the course of two years. We just had never seen that ... in the last seven, eight months, the regulatory pressure has pulled out an awful lot of capacity. I don't think they're completely done with that."

His point: crash rates were rising even as big fleets got safer. That sent regulators looking at thin training standards, faked electronic logbooks (ELDs, the devices that track driving hours) and weak licensing. And the crackdown keeps going. On Brake Check (Sep 22), FMCSA Administrator Derek Barrs appeared right after the agency pulled 20,000 trucks off the road for failing standards. He said:

• A proposed rule to tighten who can be listed as a driver-training provider should come out "hopefully by the end of this year." Before recent years, Barrs said, there had been "no vetting whatsoever for anyone that wanted to be a driver trainer school. None."
• Self-certification, where companies vouch for themselves, is being ended or tightened for ELDs, drug-and-alcohol program providers and training.
• He teased an upcoming ELD fraud investigation announcement.
• Last year had the most roadside inspections in four years. "We have to do more and more and more of enforcement."

Proof it's hitting the ground. On The Freight Coach Podcast (ep. 1544, Sep 24), Chris Jolly highlighted a shipper who had to go on social media to find reefer (refrigerated) trucks from Philadelphia to Des Moines. Northeast-to-Midwest is "historically very capacity heavy." When shippers struggle to cover that lane, supply really is thin.

6. The Spot Market Flipped, Flatbed Up and Vans Down

Spot rates had an unusual week. From FTR's Weiss, for the week ended September 18:

The flatbed jump was "the largest in a corresponding week since at least 2008." Last week flatbed was the weak spot and looked like it was sliding again. This week it led. Loads rebounded 26.7% after Labor Day, and volume was the strongest in nine weeks, about 10% above last year.

A caveat: remove the fuel part of the rate and spot rates are up about 35% from a year ago, not 41%. Some of the headline gain is just carriers passing diesel through.

7. Carriers Are Losing the Race Against Fuel

This is the quiet squeeze under the headline rate gains.

From FreightWaves Today (Sep 28): all-in spot rates rose 2 cents a mile last week. Diesel rose 10 cents a gallon to just under $6.57, up 16.5% in a month. "Fuel is rising more quickly than spot rates." And carriers eat the full fuel cost on "deadhead" miles, when the truck is driving empty to its next pickup.

RXO's Corey Klooza, VP of pricing and procurement, gave the broker's-eye view on FreightWaves Today (Sep 22). Line-haul rates (the rate before fuel) are "north of 40 percent up year over year." But:

"The line haul yield for the average carrier in the market is really nowhere close to what it was in the past cycle ... that spread is really not where it should be during a peak sustained cycle."

The fuel surcharge trap. A fuel surcharge is the extra amount shippers pay on top of the rate to cover fuel. It uses a formula: (today's diesel price minus a "base" price) divided by an assumed miles per gallon. Adam Wingfield on The Long Haul (Sep 24) ran the numbers for a small carrier:

• In late February, diesel was $3.72. At 6 miles per gallon, fuel cost 62 cents a mile. Today it costs $1.05 a mile.
• That's about $1,075 more per truck per week on a 2,500-mile week. It's almost $52,000 a year.
• Fuel is now roughly 45% to 50% of a small carrier's total cost per mile.
• Many surcharge formulas were written with a $2.50 base price. At today's diesel, that pays about 63 cents a mile, against a real cost of $1.05. That's a gap of about 40 to 42 cents a mile, or about $1,000 a week coming out of the carrier's pocket.
• Even with a lower $1.25 base, the gap is still about 21 cents a mile.
• The one bright spot: a truck that gets 7 mpg against a table that assumes 6 comes close to breaking even.

This is the mechanism behind J.B. Hunt's warning last week. It's also why RXO's Klooza thinks fuel "could be another catalyst to push capacity out of the market."

8. Autonomous Trucks: The Math Gets Real, the Timeline Gets Questioned

Two very different takes on self-driving trucks this week.

The bull math. Ravi Shankar, Morgan Stanley's U.S. freight transportation analyst, on Thoughts on the Market ("AI Meets the Physical Economy," Sep 25):

• The debate has moved "from does this work to can this work for me." Aurora has logged almost half a million fully driverless revenue miles. Kodiak is running paid loads for customers like Atlas.
• Autonomous trucks should cost about 20% less per mile. Drivers are 35% to 40% of a trucker's roughly $3-a-mile cost, even after paying the tech company about 85 cents a mile. Autonomous trucks also burn 13% to 22% less fuel, which matters a lot at $6.60 diesel.
• The surprise: those cost savings are only about a third of the benefit. The other two-thirds come from utilization, because a truck without a driver doesn't need to stop and rest.
• Morgan Stanley's location study found the average large commercial facility is less than 2 miles from a highway ramp. That undercuts the idea that you always need a human for the first and last mile.
• He expects serial commercial production to begin next year.

The skeptic's view. Aurora's investor day in Dallas set a target of more than 30,000 driverless trucks by 2030, over $5 billion in revenue and a gross margin near 60%. It plans to end 2026 with 200 trucks, which CFO David Maday said would mean an $80 million annual revenue run rate. On WHAT THE TRUCK?!? (Sep 28), host Dooner, who lives near Aurora's Texas hub, wasn't buying the timeline: "Eventually, yes. On this time frame ... absolutely not." Investors seemed to agree. The stock fell 10% on the day.

Also this week: Swedish autonomous-truck company Einride said it will build its next-generation system on NVIDIA's Hyperion platform. It expects its fleet to reach 1,500 to 2,000 vehicles by 2028 (FreightWaves Today, Sep 24).

The Debate: Real Turn or False Start?

The frame has shifted since last week. The question isn't "capacity bull vs. demand bear" anymore. It's whether a recovery built only on shrinking supply can last while fuel eats the margins. This week's podcasts supported both sides, so here are both.

The Case That the Turn Is Real

• Capacity is still leaving, and the government isn't done. Schneider's Filter: "I don't think they're completely done with that." FMCSA has pulled 20,000 trucks, has a training rule coming by year-end and an ELD fraud case in the works.
• Rejections are sticky at ~14% without any demand help. If a flat-demand market stays this tight, any real pickup in demand could spike rates. Filter's image was a "compressed spring" in housing and autos: people want to buy but are waiting out rates. "When that happens ... it's a dramatic change."
• Fuel is a second capacity killer. RXO's Klooza said carrier margins are thin even at +40% rates. With the surcharge gap and deadhead costs, the weakest small carriers are bleeding cash. He sees "capacity continuing to leave and rate volatility to the upside heading into Q4 and into 2027."
• Some macro data turned up. S&P Global's manufacturing PMI (a monthly survey of factory purchasing managers; above 50 means growth) jumped to 57 from just under 54. That's the strongest reading since May 2022 (FreightWaves Today, Sep 28). New home sales rose 6.4% in August. Retail sales rose 1.2% in August, and 4.9% from a year ago even after removing gas stations (FTR).

The Case That It's a False Start

• Demand isn't there, and the people closest to it are getting nervous. FreightWaves CEO Craig Fuller on Sep 22: "This is not a demand-driven recovery ... I start to get a little worried about the demand. I was more bullish on demand, you know, four or five months ago." On Sep 23 he added that "there is a slowdown in economic activity." RXO says the goods-spending rebound is "a little bit misleading," since "most of that, if not all of it" is higher energy prices.
• The factory data isn't clean. FTR's Weiss noted manufacturing output fell 0.3% in August. That was the first monthly drop this year, and the declines were "broad-based" in durable goods. Housing starts fell to 1.275 million, the lowest since last October apart from May.
• Rates keep going up. Mortgage rates jumped to 6.95%, the biggest weekly rise since April of last year. The 10-year Treasury yield rose to about 5.20% from 4.80%. Markets see better than 75% odds of another quarter-point Fed hike (AG Bull, Sep 28). That's the opposite of what un-sticks the housing "spring."
• Truck-to-rail takes long-haul volume away for good. Even if capacity stays tight, the most profitable long-haul truck freight is moving to trains. BNSF says it's building for an "era," not a moment.
• Imports may have peaked. The ocean import index fell about 1% week over week. FreightWaves wondered if the early pull-forward means "we have passed that peak of importing."

My read: Supply is doing all the work, and it's doing enough to hold rates up for now. But the demand side got a little worse this week, not better. And diesel is quietly moving the best freight onto rail. The trucking "turn" is real in price but hollow in volume.

The Names in Play

Schneider (SNDR). New CEO Jim Filter was everywhere this week. Schneider is well placed on both sides of the fuel trade. It is a large intermodal player, primarily with UP in the West and CSX in the East, plus some Norfolk Southern. Filter's view that the regulatory capacity purge isn't finished supports the truckload side. His openness to the UP–NS deal (if it adds lanes and cuts transit time) is worth watching, because Schneider is a direct customer of all three railroads involved.

RXO (RXO). Klooza's comments were balanced. Q3 started hot, but "the first three weeks coming out of Labor Day was a little bit softer." Shippers are running mini-bids (small, fast rounds of contract re-pricing) to lock in routing guides, which "is kind of eating into the overall demand on the spot side." For a broker, less spot freight and thinner carrier supply at the same time is a margin squeeze. Watch for it in Q3 results.

Union Pacific (UNP) / Norfolk Southern (NSC). The deal is alive, but it now has a named skeptic on the STB and a very loud opponent in BNSF. BNSF's "shrank by 13 percent" line is the kind of argument that sticks in a regulatory record. The near-term offset: every railroad benefits from truck-to-rail conversion. Intermodal +6.9% is a good week to be arguing about growth plans.

CSX (CSX). A quiet winner in the BNSF interview. BNSF–CSX runs the fastest train in North America. BNSF has partnered with CSX for single-bill (one-invoice) service into Atlanta, Northwest Ohio, Jacksonville and Charlotte. If UP–NS goes ahead, the BNSF–CSX pairing becomes the obvious competing coast-to-coast network.

Aurora (AUR). The investor day targets were bold: 30,000 trucks, $5 billion in revenue, 60% gross margin, all by 2030. The market cut the stock 10%. Morgan Stanley's cost-per-mile math supports the long-run story, and $6.60 diesel makes the 13% to 22% fuel savings worth a lot more. The debate is purely about timing.

Read-throughs

Freight brokers and spot-heavy truckload carriers. Brokers face two problems at once. The legal one got worse. On FreightWaves Today (Sep 23), transportation attorney Greg Reed of Hanson Bridgett said that after the Supreme Court's Montgomery ruling, "the firewall of liability that existed under F4A preemption has largely evaporated." That was the federal rule that used to shield brokers from state accident lawsuits. On WHAT THE TRUCK?!?, the hosts discussed a broker now facing a RICO (racketeering) claim. Their verdict: "The broker, as we know it, is dead." They called the lawsuit strategy "a playbook in development" aimed at smaller brokers without TQL's or C.H. Robinson's legal resources. Add RXO's point about mini-bids draining spot volume, and asset-light brokers are squeezed on both volume and liability costs.

Small truckload carriers and owner-operators. This is where fuel hurts most. The surcharge gap (20 to 40+ cents a mile), empty-mile fuel costs, rising driver pay competition and a $6.95 mortgage world all land on the smallest fleets. Jet Express's Hackett: recruiting is more competitive "because the rates came up, even though freight volume is kind of flat." That's the mechanism that pushes more capacity out, which supports the bull case for the survivors.

Truck dealers. This is not Class 8 data, but it's worth noting. Automotive News Daily Drive (Sep 26) reported that dealers in Texas and Oklahoma are nervous about piling-up inventory of heavy-duty diesel pickups as diesel nears $6.50. Buyers are farmers and small commercial operators, who are "just getting hammered right now from every direction." The warning from the reporting: "watch out for Q4." When small commercial buyers pull back on diesel pickups, that's a caution flag for the small-fleet buyers of bigger trucks too.

Railroads and intermodal marketing companies. The clearest winners of the week. Diesel is doing their sales work for them. Intermodal contract rates are up about 8%, volume is up nearly 7%, and BNSF says it has "more coming in than we have going out."

Grain shippers and rail grain. The picture is mixed:

• Good: At the Trump–Xi summit, the two sides agreed to cut tariffs on $30 billion of goods and extend the trade truce to mid-January. China dropped its country-specific tariffs on U.S. wheat, barley, corn, rice, sorghum, beef and chicken (Grain Markets and Other Stuff, Sep 28).
• Bad: Soybeans, the single biggest U.S. farm export to China, were deliberately left off the list. China kept an extra 10% tariff as leverage. Joe Vaclavik of Standard Grain noted China's buying this year (more than 10 million metric tons) has come mostly from state-owned buyers, who don't pay tariffs to their own government.
• Weather: The harvest is late. Iowa corn was only 4% harvested versus 8% a year ago, and soybeans 2% versus 4% (Sep 23). Des Moines has had about 13 inches of September rain, nearly a record. That pushes the fall grain surge on rail and truck later into October.
• Costs: Tommy Grisafi on AG Bull (Sep 24) warned that high diesel, if it lasts for months, turns into a demand killer. It also makes U.S. grain less competitive abroad.

Autos and cross-border. U.S.-made vehicles have fallen from about 40% of Canadian sales to 28.4% in the first half of 2026. Mexico is at 22.2% and could overtake the U.S. as Canada's top supplier next year. That's according to David Kennedy of Automotive News Canada (Sep 22). The White House itself put the cost to the U.S. auto industry at about $5.5 billion. On Decouple (Sep 25), Jesse Huebsch said the administration has threatened to delay the opening of the new Gordie Howe Bridge between Detroit and Windsor indefinitely. He also warned the tightly linked cross-border parts supply chain could see "very critical components that would suddenly be unavailable." For rail auto traffic, down 19% in the week-36 data, there's no relief in sight.

Fraud and Theft

• A fake fleet. Federal prosecutors charged Nevada man Christopher Lunsford in an alleged $105 million truck-lease Ponzi scheme. He allegedly promised investors weekly payouts of up to $1,250. A parallel SEC case says about 765 investors were told the operation ran a 2,000-truck fleet, which regulators called "wildly overstated" (FreightWaves Today, Sep 28).
• Theft before the truck arrives. The FBI's Memphis cargo-theft task force says criminals now use hacking and social engineering to spot high-value loads and pose as the real carrier: "by the time a truck arrives at the dock, the theft has effectively already happened." The advice: "verify, verify, verify."
• Fuel fraud rises with diesel. Samsara's data shows fuel-card fraud goes up about 9% for every 10-cent increase in diesel. At today's prices, that's a real cost line (FreightWaves Today, Sep 24).

What Changed vs. Last Week

The Bottom Line

Three things to carry into October:

1. Diesel is a refining problem, and refineries don't get fixed quickly. Oil can fall and diesel can still rise. Watch the crack spread (about $100 now, normally about $20), Russia–Ukraine talks on energy strikes, and the export-ban decision, which could come any day. Flynn thinks we're at the top. Johnston thinks $300-a-barrel diesel is possible. Both are serious people.
2. Trucking capacity is tight because of regulation, not demand. That keeps rates high, but it's a fragile kind of tight. The swing factor is still housing and autos, and higher interest rates are pushing the wrong way on both.
3. The real winner of $6 diesel may be the railroads. Truck-to-rail conversion is showing up in the volume data, in intermodal pricing and in what railroad executives say they're hearing from shippers. If this becomes an "era" and not a "moment," long-haul trucking loses some of its best freight even after diesel comes down.

What I'm watching next week: whether week 38 rail data confirms the intermodal surge; the export-ban decision; Q3 earnings previews from J.B. Hunt and the other truckload carriers (J.B. Hunt's warning last week pointed to roughly $1.77 in Q3 EPS against $2.10 consensus); any move in tender rejections as the quarter ends; and whether Flynn's call on the diesel top holds.