Iran-Related Diesel Spikes Squeeze Independent Truckers

Higher diesel prices tied to the war in Iran are squeezing independent trucking companies that lack the financial flexibility of larger fleets, even as improving freight rates help offset cost pressures across the broader industry.

Rising oil prices directly impact motor carriers by driving up diesel costs, according to American Trucking Associations Chief Economist Bob Costello. Fuel represents the trucking industry’s second-largest expense after labor. Costello added that nearly half of global shipments of urea, a key ingredient in diesel exhaust fluid, originate in the Persian Gulf.

The energy shock also threatens freight demand by reducing consumer spending power. “When consumers pay more at the pump to gas up their cars, it leaves less room in their household budgets for other purchases,” Costello said. “That means fewer goods that travel by truck, from retail products to building materials.”

Larger fleets operating under long-term contracts recover higher fuel costs through fuel surcharge programs and wholesale purchasing arrangements, while independent owner-operators often rely on freight brokers and buy fuel at retail prices.

In a poll by the Owner-Operator Independent Drivers Association, a majority of independent drivers said fuel surcharges were not keeping pace with expenses, with many reporting they received no surcharge at all or that broker-issued surcharges were folded into an all-in rate. According to OOIDA Foundation director Andrew King, research shows about 40% of owner-operators are unable to negotiate surcharges.

Fuel surcharge adjustments typically lag diesel price increases by one to two weeks, forcing smaller operators with limited cash reserves to cover immediate fuel cost increases out of pocket before reimbursement catches up, King said. To maintain cash flow, owner-operators are increasingly turning to factoring companies for faster payment on freight invoices, albeit at a cost.

The spike in diesel costs comes as the trucking industry emerges from a prolonged freight recession that lasted from 2022 into early 2026. According to King, long-haul trucking has lost roughly 60,000 drivers since the recession began, tightening capacity and giving surviving carriers pricing power.

Industry analysts say the freight market recovery is supply-driven. DAT Freight & Analytics reported that spot rates increased across van, refrigerated and flatbed freight in May despite declining shipment volumes. ACT Research projected that truckload spot rates excluding fuel are on pace to rise more than 40% year over year in June due to constrained carrier capacity, though a seasonal cooldown is expected after the July Fourth holiday.

Manufacturers are also reporting higher transportation costs. The Institute for Supply Management Manufacturing Purchasing Managers’ Index rose to 54% in May, but its Prices Index remained severely elevated at 82.1%. In the report, 42% of respondents cited the war in Iran as a concern, with executives across multiple sectors noting that surging diesel costs and freight surcharges are squeezing profitability.

Meanwhile, the housing market remains a drag on freight generation. The National Association of Home Builders Housing Market Index fell two points to 35 in June — well below the 50-threshold separating growth from contraction — signaling that a soft residential construction sector continues to limit truckload volumes for building materials.

King said experienced owner-operators with established broker relationships or direct shipper contracts are typically better positioned to absorb fuel price volatility than newer carriers. Many of these veterans have managed costs through previous market cycles, while newer operators remain exposed to sudden price spikes.

According to King, about 30% of new trucking companies fail within their first year. When operating costs spike rapidly and margins become unsustainable, some newer operators are forced to leave the industry entirely or surrender their independent operating authority to lease onto larger fleets.

Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com