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**Kyle Rizdal** (1:35)
Supply chains today. It's been a while since we've talked about them. How about a nice honey mustard chicken sandwich?
And then we'll go to the mountains for some fresh air and dark skies. From American Public Media, this is Marketplace.
In Los Angeles, I'm Kyle Rizdal. It is Tuesday, July 21 Good as always to have you along, everybody. Our starting point today is the loading dock at the warehouse that supplies your local grocery store or maybe your neighborhood hardware store. More specifically, the semi-truck that's backed up to that loading dock. And even more specifically, the two huge fuel tanks that truck has, maybe 300 gallons capacity, give or take. And with diesel at $5.14 a gallon today, so says AAA, I mean, you do the math. The per barrel price of oil gets most of the headlines. Yes, present company included, Mea Culpa. But the reality is that the straight up cost of driving goods around the country is a huge part of what is driving up costs overall. Last month, trucking rates were up almost 30% over the same time a year ago. That's according to the DAT Freight and Analytics.
And consumers are getting squeezed. Yes, we know that. But as Marketplace's Justin Ho reports today to get us going, small businesses are getting squeezed too.
**Justin Ho** (3:09)
Ever since oil prices spiked earlier this year, Randy George has been paying more to truck in ingredients for the bakery he runs in Middlesex, Vermont, called Red Hen Baking Company.
**Randy George** (3:18)
What we normally see when we see these kinds of spikes is the fuel surcharge.
**Justin Ho** (3:23)
George says that's affecting the cost of butter, nuts, olives and flour.
**Randy George** (3:27)
A trailer truck can hold 26 tons of flour. I know that because we buy it by the truckload. 26 tons, that's a lot of fuel every mile.
**Justin Ho** (3:36)
Fuel isn't the only thing that's making transportation more expensive. Businesses are still having to pay tariff surcharges.
**Kyle LaFond** (3:42)
Even just the overall rate that these companies are charging, we see that going up all the time.
**Justin Ho** (3:48)
That's Kyle LaFond, the founder of Natural Contract Manufacturing, a company in Madison, Wisconsin that makes deodorants, skin creams and other men's grooming products. He says the company's been doing what it can to buy more supplies from domestic companies to help bring down his tariff costs.
**Kyle LaFond** (4:03)
If I can find a domestic manufacturer of an ingredient that we've been sourcing overseas, that's obviously a win.
**Justin Ho** (4:11)
But LaFond says he can't rely on domestic manufacturers for everything, and either way, he still has to truck those products in. So to help the company deal with the higher cost of trucking?
**Kyle LaFond** (4:21)
We're developing a plan to basically transfer those costs to our clients, to have our own fuel transportation, shipping surcharge of some sort.
**Justin Ho** (4:31)
Not every business is passing on these higher costs. Pat Whalen is president of Zahadi Fine Foods, a grocery store in Brooklyn that specializes in selling products from the Mediterranean and the Middle East. He says his trucking costs have gone up around 10-12 percent in recent months. But for now, he's just going to eat that cost.
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