Gas prices get the headlines. Diesel is the one that actually moves things.
It costs $5.38 a gallon right now - up 41% since the Iran war started. That's only the second time in history diesel has been this expensive. And the people it's hitting hardest aren't oil companies or airlines. They're the small truckers who carry freight across the country.
Diesel is the single biggest daily expense in trucking. For large carriers with long-term shipping contracts, the math still works - those deals include fuel surcharge clauses that adjust when diesel climbs.
Small operators don't get that cushion. Rates on the spot market are negotiated "all-in" - no carveout for fuel. So when diesel jumps 41% in a month, small truckers eat the entire cost.
Cash flow makes it worse. Most truckers don't get paid for weeks or months after hauling a load. Big carriers have working capital to float the gap.
Small operators are spending thousands more on fuel today and waiting to collect on jobs they finished last month.
This didn't start with the Iran war. The trucking industry has been in a slow-motion shakeout since late 2022.
During the pandemic, freight rates climbed nearly 40%. Thousands of new operators flooded in - most with fewer than five employees. When consumer demand slowed, the market flipped. Too many truckers chasing too little freight.
Stephen Burks, a former truck driver and economist at the University of Minnesota Morris, estimates roughly 450,000 owner-operators currently haul long-distance freight. Many were barely hanging on before diesel spiked.
The $5 diesel shock could force some truckers to park their rigs for good. That would tighten capacity - which would eventually push shipping rates higher for the operators still standing.
But for now, the pain is concentrated on the smallest players. And everything they haul - food, raw materials, consumer goods - will cost more to move.
That cost doesn't stay in the truck. It gets passed down the line.
