Small trucking companies may find the cost of diesel to be unaffordable

According to several truck drivers and industry insiders, the high cost of diesel may push out certain small trucking companies that cross-country deliver supplies and goods on razor-thin margins.

Tim Smith, a truck driver from Michigan, said of his firm’s situation: “I’m in survival mode right now. “If there’s no profit, there’s no point.”

Sand and gravel needed for Lansing state highway and construction projects have been hauled by Smith’s business, Tim A. Smith Trucking LLC, for 12 years. His business has recently been losing money.

According to AAA, the average price per gallon of diesel in the U.S. is $5.07 as of Wednesday. Smith is paying more than twice as much for the fuel each month, or $40,000 than he did last year.

Smith added that he intended to save money by buying less expensive vehicle parts and tires while his business consumed cash, saying, “We’re all kind of rolling the dice.” He indicated he would park his vehicle if it didn’t work.

Following the upheaval in the energy market brought on by Russia’s war in Ukraine and the continued pandemic, truck drivers and customers are confronting record-high gas costs.

Small trucking businesses, often known as owner-operators, occasionally cannot agree to a fuel fee that would let them pass on the rising cost of gasoline to a shipper’s cargo bill, making them subject to changes in prices.

Smith, for instance, received a flat rate to deliver goods without additional fees while operating under a state-highway contract.

According to the Owner-Operator Independent Drivers Association, small trucking companies purchase 80,000 gallons of diesel annually on average.

It’s only a matter of time, according to Brian Hitchcock, head of the Michigan Trucking Association, until the increased costs force some businesses to close.

“It’s definitely going to affect some owner-operators and smaller carriers,” he said.

Marquis Kirk, 40, said he is thinking about cutting back on staff at his Baltimore-based company to stay in operation. Four drivers work for him, and he owns four trucks.