Small Businesses Face Margin Pressure as Fuel and Freight Costs Rise

Small businesses are reporting narrower profit margins and weaker customer demand as higher fuel and freight costs raise operating expenses ahead of the September Consumer Price Index (CPI) report.

Higher fuel and freight costs are increasing delivery expenses while leaving customers with less disposable income. Businesses that depend on transportation are therefore facing pressure from both higher costs and softer spending.

Owners also cited rising prices for equipment, replacement parts, raw materials and health insurance premiums as challenges to daily operations. Many have struggled to pass those expenses to customers because price increases can drive buyers away.

The September CPI report is due Wednesday, Oct. 14. Fuel costs remain part of the broader U.S. inflation picture, following earlier coverage of record U.S. diesel prices near the inflation report.