It's Not The Price of Diesel. It's This. - Northstar Consulting Group

I read a lot of industry interviews. Most of them say nothing. Someone gets asked a hard question and answers with something safe, something polished, something that sounds good but tells you nothing about ow they actually run their business.

That’s not what happened when I came across a recent interview with Mike Kucharski, co-owner and VP of JKC Trucking out of Chicago.

He said something that stopped me cold. And I’ve been turning it over in my head ever since.

Nobody’s asking the right question about fuel.

Every conversation I have with fleet owners eventually lands on diesel. What’s the price doing, where’s it headed, how bad is it going to get. And almost every time, the question underneath all of that is: at what number do things get unmanageable?

Mike got asked exactly that in the interview. At what price per gallon do you start making hard decisions?

His answer wasn’t a number. It was this: it’s not the price that hurts. It’s the speed.

I’ve been saying a version of this to clients for years, but he put it cleaner than I ever have. When diesel spikes fast, it doesn’t just make your costs higher. It breaks the timing of your entire cash position. Fuel gets purchased today. Payment for that load arrives in two weeks, maybe three, sometimes longer. That window in between — that’s where carriers bleed out. The invoice hasn’t cleared. The money isn’t in yet. But the fuel bill already came due.

I’ve personally watched operators survive $5 diesel with room to breathe, then get knocked sideways by a $1.20 jump in under a month at a lower average price. The math looked better on paper. The reality was brutal. Speed is what creates the crisis. Not the level.

Turning down freight is a skill. Most carriers treat it like a failure.

Here’s something Mike shared that I think deserves more attention than it’ll get: he’s passing on two to five loads every single week. Not because his trucks are unavailable. Because when he runs the numbers on fuel, the loads don’t pay enough to be worth moving.

That’s harder than it sounds. I want to be clear about that.

There is enormous psychological pressure on a carrier to keep trucks moving. A sitting truck feels like wasted money, even when taking a bad load would actually cost more. Drivers feel it. Dispatchers feel it. Owners feel it most of all. The silence of a parked truck has a weight to it that’s hard to describe if you haven’t lived it.

But here’s what I know from years of working with fleets: moving freight at a loss is not a revenue strategy. It’s a slow leak. You’re burning fuel, putting miles on equipment, paying drivers — and coming out behind. Do it long enough and the damage compounds in ways that are very hard to reverse.

Mike also refused to lock in 90-day fixed rates for a new customer who asked for them. His reasoning was simple. He can’t predict what diesel will cost next month, let alone three months from now. The only honest thing he could offer was weekly spot pricing. The customer said fine.

That outcome matters. Shippers are not as locked into low rates as carriers assume. When you show up with honest numbers and explain the math without apologizing for it, most of them understand. They’re watching diesel prices too. The danger isn’t the rate conversation — it’s never having it.

Cost per mile is either your compass or your blind spot. There’s no in between.

Mike said something else in the interview that I want to put in front of every small fleet owner reading this.

Revenue means nothing if you don’t know your cost per mile.

I’d sharpen that even further. If you don’t know what it costs you to run each specific lane you operate — not an average, not an estimate, the actual lane-level number at today’s fuel prices — you are making decisions in the dark. You might be profitable. You might be losing money on half your freight. Without that number, you genuinely cannot tell the difference.

This isn’t a theoretical problem. I’ve sat across the table from owner-operators running a dozen trucks or more, trucks that never stopped moving, and asked them what their cost per mile was on a specific lane. Long pause. An estimate. Sometimes a guess. Not because they weren’t sharp — most of them were sharper than anyone gave them credit for — but because in better markets, they never had to know it precisely. The margin covered the uncertainty.

That margin is gone now. And so is the room for guesswork.

Cost per mile is the number everything else gets built on. Route decisions, load selection, rate negotiations, evaluating whether a fuel program actually saves you money on a given lane — all of it requires that foundation. Without it, you’re just reacting. And reacting in this market is expensive.

The rate conversation you’ve been avoiding is the one you need most right now.

In the interview, Mike described going back to a long-term customer — a meat shipper he’d hauled for across many loads — and telling them the rate had to go up. Not because he wanted more margin. Because fuel costs on that lane had moved and the old rate no longer made sense.

The customer heard him out. They agreed to a higher 30-day rate.

What made that work wasn’t toughness or leverage. It was specificity. Mike went in with actual numbers — here’s what fuel costs me to run your freight, here’s what that does to my margin, here’s what I need to keep showing up. When you frame it that way, the conversation stops being adversarial. You’re both looking at the same problem instead of sitting across from each other.

Carriers who avoid this conversation tend to end up in one of two places. They absorb the loss until they can’t anymore, and the relationship falls apart anyway when they finally have to walk away. Or they just quietly stop taking loads from that customer without ever explaining why, and both parties lose something that could have been saved with one honest talk.

Most shippers would rather keep a carrier they trust than shop for a slightly cheaper one they don’t know. You just have to give them the information they need to make that choice.

The part of Mike’s interview that I can’t stop thinking about.

Toward the end, the interviewer asked what questions Mike still couldn’t answer. What kept him uncertain.

He didn’t hesitate. Volatility.

Not the price of diesel being high. The price of diesel being unpredictable. There’s a real difference there that I think gets overlooked. A carrier can build around expensive fuel. You recalibrate your rates, you get disciplined about load selection, you tighten your cost structure and you run. High but stable is manageable. What you cannot build a business around is a market that swings $1.50 in either direction over three weeks and gives you no signal about where it’s going next.

That uncertainty ripples through every decision. How do you quote a lane six weeks out? How do you plan capacity? How do you tell a customer what their freight will cost when your biggest variable changes weekly?

Mike also raised something bigger. The policy conversation. Targeted fuel relief when markets get extreme. Temporary suspension of diesel taxes during supply shocks. Emergency credit access for small carriers who can’t absorb a sudden spike the way a large fleet can. Strategic reserve management that treats trucking as the essential infrastructure it is.

I think he’s right on all of it. These aren’t carrier wish-list items — they’re the kind of structural protections that every other piece of critical infrastructure gets in some form. Trucking moves everything. Medical supplies, groceries, industrial materials, refrigerated food. When carriers start failing because fuel costs exceed what the freight market will pay, that disruption moves downstream fast. Consumers feel it. Every industry feels it. Trucking collapses first and most visibly, but nothing else is far behind.

Whether the political will exists to do any of that is a separate question. The argument for it is sound. More voices in this industry need to be making it.

Know your cost per mile. Lane by lane. At today’s fuel prices. Not last quarter’s, not what you hope they’ll be — today’s. Build that number and use it every time a load decision gets made.

Have the rate conversation. With existing customers, with new ones. Come in with the math and let the numbers do the talking. Don’t apologize for needing your margin to make sense.

Stop taking freight that doesn’t work. A sitting truck costs you less than a moving one that’s losing money. That’s the math. It’s uncomfortable but it’s true.

And treat fuel as a strategy, not an expense line. Route decisions, fueling locations, load selection — all of it connects back to what you’re spending at the pump and whether you’ve built a system around controlling it.

If you’re working through any of this and want another set of eyes on the numbers — cost per mile, lane analysis, rate structure, fuel strategy — reach out. It’s what I do.

Cost per mile starts at the pump. If you want to bring that number down with real fuel discounts built specifically for carriers, the Northstar Fuel Program is worth a look: Fuel Program