Fewer truckload carriers went bust last year. In 2004 there were approximately 1,195 bankruptcies or other closings in the truckload sector (not counting one-person/one-truck operations). That number was down considerably from the 3,990 closings in 2001, the worst year of the most recent economic downturn.

Donald Broughton, the A.G. Edwards & Sons analyst who compiles those figures, says his crystal ball isn't quite as clear for 2005. But it would be hard to imagine fewer trucking closures this year than last, he says, for one reason: The high price of fuel.

Still, the days of a direct linkage between the price of fuel and trucking bankruptcies may be over. (See chart, below.) That's because all of the weak operators have already closed, and the survivors in today's $2.30-a-gallon world are pretty tough operators, Broughton says.

And rise they certainly have: On-highway diesel prices rose 11 of 12 weeks during one stretch this year. The price of a gallon of diesel soared to about $2.30 this spring, up from $1.61 in April 2004. That's a 42 percent increase; bad enough on its own, but it pales in comparison to the nearly 100 percent increase since early 2002, when the average on-highway diesel price was around $1.16 a gallon.

Most truckload carriers get an extra penny a mile for every six-cent rise in the price of diesel. Recently several carriers began raising their surcharges by one-half cent per mile for every 2-½ cent price increase. That formula eventually will become the standard. It's not surprising that carriers would favor that approach: Werner Enterprises, the nation's fifth-largest truckload carrier, reported that income from fuel surcharges rose 127 percent in the first quarter of this year.

Some analysts are predicting that diesel fuel may eventually slide under $2 before next winter's home heating season puts stress on the price of the raw distillate. Regardless of what happens to fuel costs, though, shippers should expect already strong rates to move higher, they say.

The reason: Truckload carriers are chasing record amounts of freight with virtually no increase in capacity, due to the continuing driver shortage. That means carriers have more business than they can handle, and rates are rising accordingly. "Back in 2001, you had rising fuel and declining demand," says Broughton. "Now you have rising fuel and demand is still strong."

Smith Barney trucking analyst Scott Flower says his proprietary truckload pricing index showed a 5.5 percent year-over-year increase in March, reaching the highest index reading since June 1992. He sees "limited evidence" of capacity increases because of the lack of drivers, and forecasts higher prices through 2005.

Flower warns that rate increases and improving profitability may attract new competition in the truckload market, where barriers to entry are low. Still, it would take a flock of new entrants to create enough new capacity to restrain anticipated rate hikes.