Transport companies — the backbone of economy — are sounding alarm on fuel prices

Transportation companies, the lifeblood of the U.S. economy, are flashing warning signs as diesel costs hit records.

Prices for diesel, the fuel type used to power trucks and trains, came in at an all-time high of around $6.31 per gallon on Wednesday, according to AAA. Diesel prices have surged more than 70% from a year ago, which analysts attribute to the supply shock from the U.S. war with Iran.

“We have seen some of the most radical and abnormal swings in fuel prices that I think we’ve ever seen,” said Brad Delco, finance chief at trucking company J.B. Hunt, at an industry conference hosted by Morgan Stanley.

Delco said to expect a drop in earnings between 5% and 10% from the second to third quarter as a result of higher costs. Shares of J.B. Hunt dropped more than 13% in Wednesday’s session, putting the stock on track for one of its worst days since going public in 1983.

The Dow Jones Transportation Average, a broader gauge of the sector, fell more than 2% in midday trading on Wednesday. J.B. Hunt was the biggest loser of the index, which also includes rideshare providers and airlines.

‘Science fiction’

Those diesel-related price pressures should only intensify in the coming days, warned Patrick De Haan, head of petroleum analysis at price tracker GasBuddy.

The national average could eclipse $6.50 in the next two days, De Haan said. Midwest states such as Michigan, Ohio and Illinois may see per-gallon diesel prices touch $7 in the coming days, according to his estimates.

In California, AAA found that the average rate for a gallon of diesel has already surpassed $8. Prices have climbed almost 20% in the last month alone, according to the motor club association’s data.

“We’re talking about $6 diesel, but out here, it’s $8 diesel, we noticed on the way in, which is like science fiction,” said Claude Elkins, chief commercial officer at railway transporter Norfolk Southern, on Tuesday at the Morgan Stanley conference held in Laguna Beach, Calif.