When Your Contracts Lock You In and Prices Lock You Out

By Siam Sukkhee Trading Co., Ltd — 2026-09-23 — Waste360 (recycling/scrap)

I was reading about JLT Trucking, a waste collection outfit in Washington. They have more than 100 trucks and they're hemorrhaging money.

The reason is almost banal. Diesel has gone up roughly 60 per cent since the Iran war started, and they can't pass the cost on.

Their director, Marc Shaener, said this plainly to ABC News: they're losing $100,000 per month on fuel alone. Not on operations. Not on wages. Just on the gap between what they're contractually locked into charging their customers and what they're actually paying at the pump.

Here's what caught my eye.

Most of their contracts adjust once a year, or once every five years. Some don't move at all until the renewal cycle comes round. So when fuel prices spike — and I mean really spike, not a 5 per cent wobble — they absorb the full hit.

Shaener was honest about the cascade. He said their business is an economic barometer. When customers get tight on money, waste collection is the first thing they cut. It's discretionary, something like that. And customers are starting to feel the pinch already. So they're cutting orders.

Actually, that's not quite right. Let me be more precise. They're not cutting orders so much as they're walking away from services they'd already agreed to because the company can't absorb the fuel cost and the customer can't afford to pass it on to their own operations.

The whole structure sits on an assumption that was true for maybe twenty years. Fuel prices don't move that fast. Inflation is stable. Contract terms can be static.

Then reality arrives.

Now Shaener is caught between his investors, his employees, and customers who have their own budgets to hit. None of them can move. The only thing that moved was diesel, up and up and up.

This isn't unique to trucking. Metals traders know the shape of this problem intimately. When you're locked into fixed-price contracts and your input costs spike, there's no mechanism to breathe. You either renegotiate — which takes months and goodwill you might not have — or you eat it.

That's before anything else shifts.

Source: "We can't increase its rates to keep up because its contracts usually adjust annually or every five years so it has been forced to absorb its higher costs." — ABC News

Tags: metals recycling Thailand