Why California Trucking Profits Are Shrinking

Current as of October 2026.

In 2025, the cost of running a truck, not counting fuel,

rose to $1.854 per mile, up 4.2% from the 2024 average of $1.779

. That's according to the American Transportation Research Institute's yearly cost study, which came out this summer. For an owner-operator running out of the warehouse corridor around Ontario and Fontana, a few cents a mile is the difference between a decent month and a breakeven one. So why are California trucking profits shrinking? The costs you can't negotiate kept climbing. Liability coverage, repairs and driver pay all rose, and none of them waits for freight to pick up. A clean record still helps you. It just can't protect you from an industry-wide jump in what a serious crash costs once it reaches a courtroom.

Why is my renewal climbing when I haven't filed a claim?

This is the question owner-operators ask most, and the numbers explain a lot of it. ATRI found that

the average cost per mile for coverage in 2025 was 10.6 cents, up 3.9% from 2024 and up 23.9% from 2021

. The same study says

nuclear verdicts, lawsuit awards against larger carriers considered to have "deep pockets," are blamed for much of the increase

.

You might never be part of a verdict like that. You still pay for the trend, because carriers price the whole pool of trucks that look like yours. From the driver's seat it feels unfair, and in a way it is.

The scale adds up fast. A cent or two per mile turns into hundreds of dollars a year for a truck that runs long days. A missed renewal or a dropped account can swing a small fleet's month by thousands.

Why do two clean trucks get such different prices?

Start with what the state requires. California's DMV runs a Motor Carrier Permit program for carriers hauling property, and the required liability limits

vary from $300,000 to $5,000,000 combined single-limit coverage, depending on the type of vehicles and the property transported

. That range is the first place most comparisons go wrong. The state's passenger car minimums have nothing to do with these filings. A box truck hauling furniture and a tanker hauling fuel aren't even playing the same game.

Weight and cargo come next. A heavier truck does more damage in a crash, so the carrier expects bigger claims from it. Cargo matters too: refrigerated loads, high-value electronics and hazardous materials each change what a loss could cost. Once you haul across state lines, federal rules add their own minimums on top of the California filing.

Then there's how you drive the truck. Say an owner-operator in Fontana named Marco runs short drayage trips between rail yards and warehouses, and his neighbor Luis runs long overnight trips up I-15. Marco spends his day in stop-and-go traffic with lots of merges, backing and tight docks. Luis spends hours on open highway, where fatigue and speed are the bigger risks. They could have identical records and still be priced differently, because their risks really are different.

Fleet size is the last factor, and it hits small operators hardest. Big fleets have an option you don't. DMV rules say a carrier applying for a Certificate of Self Coverage needs

a fleet comprised of 25 or more commercial vehicles registered in the motor carrier name

. A two-truck operation can't spread its risk that way, so every renewal hits it at full force.

What does one bad day actually cost a small operation?

The direct costs grow with the size of the event. A blown steer tire or a cracked windshield on the 60 might run you $500 to a couple thousand dollars in parts, labor and a tow. A low-speed rear-end in warehouse traffic can reach five figures once you add bodywork, a damaged trailer and the other vehicle. A totaled tractor, a stolen loaded trailer or an injury crash can pass $50,000 before anyone talks about legal fees.

Then you lose the truck. Every day it sits in a shop is a day with no revenue while the payment, the permit and the parking bill keep coming. Shippers with tight schedules may move your lane to someone else.

The legal exposure is the part that can sink you. Your limits cap what your policy pays. If a judgment goes past them, a sole proprietor may be on the hook for the rest.

What should you ask before you buy a truck or sign a lease?

Before you buy, ask the dealer for the full maintenance history and any open recalls on that VIN. Ask your lender what physical damage protection the loan requires, and whether the payoff could end up higher than the truck's value in the first couple of years. Ask your repair shop how long parts take for your model. A two-week backorder on a common part is something to know before you commit to a truck.

Next, build a paper trail. Keep daily inspection reports, oil analysis results and service invoices in one place, sorted by date. Take timestamped photos of your truck and trailer at pickup and delivery. If you're in a crash, get the CHP or police report number at the scene. Dash cam footage can settle a fault dispute that might otherwise drag on for months.

Which warning signs mean your setup is too thin?

The biggest warning sign is relying on one customer. If one shipper gives you most of your loads, one lost contract can put your whole operation at risk. Another is not having enough cash set aside to pay a deductible and cover two weeks of downtime. Hiring drivers without checking their records also counts.

Driver licensing deserves a close look in 2026. In January, federal regulators said they would withhold about $160 million from California for

failing to cancel over 17,000 illegally issued Commercial Driver's Licenses (CDLs) by the agreed-upon deadline of January 5, 2026

. Sean P. Duffy, U.S. Transportation Secretary, said in the FMCSA announcement,

"It's reckoning day for Gavin Newsom and California."

The language was political, but small carriers have practical reasons to pay attention. If you lease to or hire drivers whose license status could change, you may lose a driver on short notice. Check every driver's license status before dispatch, not once a year.

How do careful operators bounce back faster?

They know their numbers. An operator who tracks cost per mile can tell within a week whether a rate increase or a slow lane is eating the margin, and can adjust before it becomes a crisis.

They also catch problems early. Brakes, tires and lights caught during the pre-trip inspection cost far less than the same problems found at a roadside inspection or after a crash. Clean inspection history and documented training also give you something real to show at renewal time. When a loss does happen, a driver with organized records gets the claim settled sooner and gets back on the road sooner.

Run your own cost per mile this week

Pull your last twelve months of fuel receipts, truck payments, repair bills and miles driven. Divide your non-fuel costs by your total miles and compare the result with ATRI's 2025 benchmark of $1.854. If your number is well above it, you've found where to look first. Repair and maintenance spending is usually the easiest place to start.

Common Questions

Do California's 30/60/15 car minimums apply to my work truck?

No, not if you haul property for pay. Carriers in the state's Motor Carrier Permit program file liability limits that start at $300,000 and go up to $5,000,000, depending on the vehicle and cargo. The passenger car minimums are a separate rule.

Why did my trucking coverage go up with no claims?

Carriers price the whole group of similar trucks, and the cost of large court awards has pushed prices up across trucking. ATRI's 2025 data shows per-mile costs up almost a quarter since 2021. Your clean record may limit the increase, but it rarely stops it.

Can a small trucking company self-insure in California?

Not through the DMV certificate. That option requires a fleet of 25 or more commercial vehicles registered in the carrier's name. Smaller operators have to file proof of coverage from a carrier instead.

What records help most after a truck accident?

The police or CHP report number, dash cam footage, timestamped photos, and your recent inspection and maintenance logs. Together they show the truck was roadworthy and help settle the question of fault.

Protecting Your Trucks and Your Margin With the Right Coverage

Small trucking operations can't afford coverage gaps, and they can't afford to pay for protection they don't need. Farmers Insurance - Young Douglas works with Inland Empire owner-operators and small fleets to match their liability limits to their state filings, look at collision and physical damage protection for financed tractors and trailers, and decide whether umbrella liability or roadside assistance fits the way they run, depending on the policy and the operation. The agents can also explain how your cargo, routes and driver records affect what you pay at renewal. If you want a second set of eyes before your next renewal, you can review your current coverage at no cost.

Sources:

• American Transportation Research Institute data via Moberly, Cliff. "Trucking Is Getting More Expensive. ATRI Report Explains Why." TheTrucker.com, 20 Aug. 2026. thetrucker.com/trucking-news/business/trucking-is-getting-more-expensive-atri-report-explains-why
• California Department of Motor Vehicles. "Motor Carrier Permits." California DMV. dmv.ca.gov/portal/vehicle-industry-services/motor-carrier-services-mcs/motor-carrier-permits/
• Federal Motor Carrier Safety Administration. "Trump's Transportation Secretary Sean P. Duffy to Gavin Newsom on Illegal Trucking Licenses: Time's Up." FMCSA Newsroom, Jan. 2026. fmcsa.dot.gov/newsroom/trumps-transportation-secretary-sean-p-duffy-gavin-newsom-illegal-trucking-licenses-times

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