First quarter earnings at FedEx are expected to be 80 cents to $1 per share versus $1.58 a year earlier, when oil prices averaged $70 per barrel. FedEx expects fiscal 2009 earnings of $4.75 to $5.25 per share. Analysts had expected profit of $1.27 in the quarter and $5.84 for the year.

The company pointed out that fuel surcharges "are reducing demand for FedEx services and impacting yield across the company's transportation segments." Energy prices are rising so quickly that it's impossible for FedEx to recoup all of its additional costs, particularly from large shippers who pay their bills in 30 days. Big FedEx customers are no doubt balking at the additional fees which may force FedEx to either cut them or wave them entirely.

Trucking companies are also getting hammered by high gas prices. They too are assessing surcharges on customers but it's not doing them much good. Last month, Jevic Transportation Inc., one of the largest trucking companies, abruptly shut its doors after 27 years in business. The New Jersey company blamed high fuel prices for its demise which left more than 1,500 workers out of a job. High fuel prices don't seem to be helping the airlines either.

In the earnings release, FedEx Chief Executive Frederick W. Smith said, "Despite the challenging conditions, our team members continue their outstanding performance in support of our customers, as service levels and morale remain high."

You have to wonder how long that will last.