Justin Stoneman, a trucking operator with nearly three decades of experience based in central Michigan, has been forced to shutter his business amid rising industry pressures. Stoneman Trucking, which once hauled grain and fertilizer across the Midwest and generated over $3 million in annual revenue during its peak, filed for bankruptcy protection in May and is now moving toward a full Chapter 7 liquidation after facing mounting costs and debt.
The struggles of Stoneman’s business reflect broader challenges faced by small trucking companies across the United States. According to data compiled this year, 221 trucking firms have filed for bankruptcy amid a multi-year wave of financial distress not seen in decades. Many small carriers, which typically operate fewer than 20 trucks and often just one, report flat or declining revenue compared to the previous year. A recent survey by freight management firms found that nearly 40% of these operators are uncertain about their futures or expect to exit the industry within six months.
Bankruptcy attorneys and industry experts highlight several converging factors contributing to the crisis. Rising diesel prices, which surged due in part to global geopolitical tensions, have increased operational costs sharply. Insurance premiums have also escalated, sometimes dramatically. For instance, Stoneman faced a $155,000 insurance quote for just two trucks and three trailers after an accident involving one of his drivers. At the same time, many small operators depend heavily on debt financing, often taking out variable interest loans, merchant cash advances, or factoring arrangements that increase costs and expose them to financial volatility when interest rates rise.
“Smaller trucking companies don’t have the financial cushion to weather spikes in fuel or insurance costs like the industry’s larger players,” said Christopher Ward, a bankruptcy attorney specializing in transportation. Larger firms, such as J.B. Hunt Transport Services, can more easily absorb rising expenses or pass them on through price adjustments, an option usually unavailable to smaller operators competing on tight margins.
The industry’s current contraction follows a boom during the COVID-19 pandemic, when demand for freight surged, interest rates were low, and government relief supported new entrants. Since that period, many new businesses have struggled to secure enough work as freight volumes diminished and rates fell, leading to tightening market conditions.
Additional pressures come from industry-specific challenges such as freight fraud, which costs the sector an estimated $18 million daily by enabling cargo theft through stolen trucking identities. Increased regulatory enforcement on driver language proficiency and immigration status has also constrained the labor pool, driving up costs and reducing driver availability.
Some operators have opted to exit the market early amid these difficulties. Kevin McAllister, who started a three-truck company in 2021, closed his business in 2024 after declining rates and industry contraction made profitability elusive. “At the end of the day, when you do an evaluation, it was not going to be long-term profitable,” he said.
As small trucking firms confront rising costs, shrinking revenue, and tighter credit conditions, many face uncertain futures with limited options to sustain operations in a rapidly evolving market environment.