May 18, 2026 – By Christian Smith, Berkshire Financial Services
The trucking industry has been through three years of freight recession. Rates bottomed out. Capacity left the market. Owner-operators parked rigs. Small fleets cut everything and held on. Then in the first week of March 2026, diesel jumped 96 cents per gallon in a single week. The largest single-week increase the federal government has recorded since it began tracking the series in 1994. For carriers already running on margins measured in pennies per mile, that was not a market event. That was a crisis.
What the Numbers Actually Look Like
Fuel accounts for 20 to 30 percent of total operating costs in trucking. That figure expands immediately when diesel spikes. A small fleet running five trucks at 500 miles per day per truck, burning roughly six miles per gallon, consumes 400 to 425 gallons per day. At the March spike price of 4.86 dollars per gallon nationally, that is over 2,000 dollars per day in fuel alone, before drivers, insurance, maintenance, or the equipment note.
Freight rates on the spot market did not move at the same pace. Most fuel surcharge programs update weekly, so carriers were paying today’s diesel while being reimbursed on last week’s data. Large carriers have long-term contracts with automatic surcharge adjustments. Small operators do not. Spot market rates are negotiated all-in. Small operators are lucky to recover half of higher fuel costs in their rates.
The Cash Flow Trap That MCA Lenders Walked Straight Into
Carriers pay for fuel at the pump. Payment on loads can take 30 days or longer. That gap is exactly where MCA lenders operate. The pitch lands hard when you are staring at a fuel bill you cannot cover for three weeks. Funding in 24 hours. No collateral. The daily payment comes out automatically.
What the pitch does not explain is the factor rate. A factor rate is how MCA lenders price the total payback instead of a traditional interest rate. A trucking company that takes a 100,000 dollar advance at a 1.45 factor rate owes 145,000 dollars back. The 45,000 dollar difference is not labeled as interest. It is structured as a purchase of future receivables, language engineered specifically to avoid the lending laws and interest rate caps that would otherwise apply.
Courts have taken notice. The New York Appellate Division ruled in February 2026 that MCA contracts structured this way are unconscionable. Unconscionable means a court determined the agreements were so one-sided they may not be enforceable as written. That is the court’s word. Not ours.
Why Stacking Is Worse in Trucking Than in Most Industries
Trucking companies face a structural cash flow problem that makes MCA stacking more likely and more destructive than almost anywhere else. Revenue is earned per load. Loads take days to complete. Payment terms run 30 to 60 days. Fixed costs hit daily. The mismatch between when money goes out and when money comes in is built into the business model. That mismatch is what MCA lenders exploit.
A trucking company takes one MCA to cover a fuel crisis. The daily payment starts immediately. Revenue from the loads that fuel covered does not arrive for weeks. Cash flow tightens again. A second MCA fills the gap. Now two daily payments pull from the account alongside operational costs. The load board rate has to cover freight, two MCA payments, driver pay, insurance, and the equipment note before the owner sees anything.
What the Legal Environment Looks Like Right Now
Nearly all MCA agreements designate New York as the governing jurisdiction regardless of where the business operates. That was by design. New York historically offered the most favorable enforcement environment for lenders. The February 2026 appellate ruling changed that calculation. New York is now the jurisdiction where the enforceability of these contracts has been most directly challenged and found wanting. Those questions apply to every MCA contract in your filing cabinet regardless of the industry on the front of it.
The Window That Exists Before the Lender Forces the Outcome
Jamie Hagen, owner of Hell Bent Xpress in South Dakota, described his operation in March as already at the breaking point before the diesel spike. He called the spike “the nail in the coffin.”
The trucking owners who come out of this period in the strongest position will not be the ones who waited for a lender to force the issue. They will be the ones who installed structure before the decision was made for them. That structure means legal representation engaged on the file. Payments redirected into escrow with documented authorization. Lender correspondence routing through the program rather than directly to the carrier.
Diesel prices are still above where they were eighteen months ago. Freight rates are improving but not fast enough to close the gap. The MCA positions taken to bridge that gap are still pulling every week.
If your operation is carrying MCA debt on top of the current fuel cost environment, the question is not whether the pressure is real. The question is whether structure exists to manage what comes next before a lender decides to manage it for you.
The ruling does not do the work. The structure does. Enrollment is what activates the structure.
To speak with a Berkshire Financial Services Finance Manager about your file, call 1-800-801-1019.
Informational purposes only. Not legal advice. Berkshire Financial Services is not a law firm. Results vary.