Truckers are facing some tough choices as diesel fuel costs surge

With diesel pump prices climbing past the $5 mark due to ongoing overseas conflicts, shipping companies are forced to absorb heavy cash flow hits or pass those expenses down to everyday shoppers.

John Hausladen, President of the Minnesota Trucking Association, says that while those larger fleets can usually navigate the squeeze, smaller independent operators face more immediate risks.

"You have independent contractors, you have private fleets, and those are the ones that are hit the hardest," Hausladen explains. "Because if it goes too high, they just can't afford it, and so again, we've seen some drivers exit the market."

He says whether fuel rates will continue their upward march toward historic highs or stabilize in the coming weeks remains to be seen, but it has forced companies to restructure freight rates and drop clients who refuse to cover higher transport expenses.

Hausladen says there are definitely some immediate financial hurdles.

"It is really a cash flow issue because typically a trucking company will pay for the fuel sooner than they get paid by the customer," Hausladen said Monday. "So managing cash flow is one of the biggest challenges we have."

He says how long individual fleets can sustain these overhead costs, depends entirely on when the market stabilizes.

AAA says the current national average for diesel is $5.30. In Minnesota, the average diesel price is $5.13. One year ago, it was $3.74 nationally.