Will America Keep on Trucking? May saw a significant increase in trucking prices, a trend that historically impacts the party in power during midterm elections, potentially troubling Republicans heading into 2026. This rise is driven by escalating fuel costs due to global conflicts and supply constraints, leading to higher prices for goods and increased demand for warehousing. The Biden administration’s past release from the Strategic Petroleum Reserve is contrasted with the Trump administration’s current plan to coordinate a global oil release and potentially suspend the federal gas tax.

• Trucking prices are rising rapidly, leading to increased costs for delivered goods.
• This trend is seen as a negative sign for Republicans, given historical correlations between rising prices and electoral difficulties for the party in power.
• The increase in hauling costs is primarily driven by a global spike in fuel prices due to wars and blockades in the Strait of Hormuz and attacks on Russian oil capacity.
• Companies are building up inventories, leading to higher warehouse utilization and rental prices.
• The US government under the Trump administration plans a coordinated international release of oil reserves and is considering suspending the federal gas tax.
• Canada has already suspended its national gas tax.
• Diesel prices, which impact most delivery vehicles, are particularly consequential for the overall economy.
• Railroads are a more energy-efficient competitor to trucking but face limitations in rapidly scaling capacity and addressing the ‘last mile’ delivery problem.
• Increased shipping costs have a significant and persistent effect on domestic inflation.
• The US’s increased domestic oil production offers some offsetting benefits to rising energy costs, though these benefits are unevenly distributed.