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Inflation, high fuel prices has not slowed Rochester businesses running on gas

With fuel prices impacting everyone across Rochester, how are the high costs of diesel impacting the businesses that literally run on fuel in the Rochester area?

A semi-truck travels along U.S. Highway 52 Monday, Dec. 20, 2021, in Rochester.
Traci Westcott / Post Bulletin
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ROCHESTER — When driving is a big part of your business, rising gas and diesel prices can bring an unexpected roadblock to your bottom line.

When it comes to delivery services such as DoorDash and GrubHub, delivery service fees have increased in 2022 but not due to gas prices. Fees have gone up for these third-party delivery services whenever the driver has a longer than expected wait time for food at restaurants. These fees usually increase if the wait time for food goes over a half hour according to DoorDash and GrubHub.

That is why for some local restaurants, such as BB's Pizzaria, gas expenses for delivery drivers have not been a concern for annual budgets, according to BB's owner Jason Brehmer.

"For my business, using DoorDash and Grubhub the last five or six years has helped my business to thrive without the concerns other pizza delivery businesses have had to with high gas prices," Brehmer said.

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The expense of gas for third-party delivery on the job does come out of the independent drivers own pocket. That is why third-party delivery services are typically written off in annual tax reports as drivers fill out 1080 forms as independent contractors with these services.


At the city and county government level. Budget allocations for city/county owned vehicle fuel expenses are on pace to exceed their annual budget.

Karla Strain, finance director for the City of Stewartville, said fuel expenses for city owned vehicles in public works so far this year are on track to exceed the city's planned budget for the expense.

"Right now we have not exceeded our year budget for fuel. We have $49,000 in our annual budget for fuel expenses and have already spent $31,373 of that. Since we are up higher with gas expenses compared to this time last year, we're trying to be as careful as possible as we can with spending," said Strain.

At the Olmsted County Sheriff's Department, gas expenses cover a fleet of 76 vehicles. Patrol Captain Chris Wallace, who oversees the budget of fuel expenses for Olmsted County Sheriff's Office, said the current trajectory of the department's usage is going to exceed the budget, but that trajectory changes as gas prices change.

"The plan is that the budget will be increased for next year with the expectation that we're going over this year," Wallace said. "Currently we have spent $158,000 of the $220,000 of our gas budget which is 71.8% of the budget."

In an industry that literally runs on fuel, Baser Freight LLC of Rochester, have had budget issues fall elsewhere said dispatcher Ulises Gonzalez.

“What we do is we have to relate to our customer that fuel is just one portion of the cost and what we charge for pickup or delivery orders," Gonzalez said. "Insurance went up about 35% this year and if you want to look at the big picture, driver pay. When you're competing with the bigger corporations, like Walmart, they’re offering $100,000 a year for their drivers, it adds up to beat out competition.”

Gonzalez said companies like Baser Freight prepare for unexpected changes in prices.


“We forecast based on what the cost of the fuel by the mileage is. Right now we're seeing charges to customers anywhere between $1.02 and $1.05 just in the fuel per mile,” Gonzalez said.

Currently, the average price of diesel in the Rochester area is $5.43 per gallon according to AAA Gas Prices. The average price per gallon is down 10 cents from the average price on June 18, 2022.

The average cost of filling up a tank is $1,600 for semi-tractor truck drivers. Oil prices have begun to decline in their average cost per barrel in the last month since prices peaked at all-time highs. Gene LaDoucer, director of public affairs for AAA Upper Midwest, says the prices are going down due to a decline in demand for oil.

"Last week, there was a federal government report showing that gasoline demand was sharply lower following the July 4 holiday, which is allowing companies to build stronger inventories and in lower demand and ultimately drive gasoline prices lower," LaDoucer said.

Baser Freight LLC

325 Broadway Ave S, Rochester, MN 55904


Website link

Even as the prices for everything from insurance to truck parts and fuel continue to rise for the transportation and logistics industry. Gonzalez says it will not keep Baser Freight from hiring more drivers as they hope to continue to expand their fleet.

“I don't see inflation downgrading our business. It’s more of an opportunity for growth because the majority of companies just shy away from the prices if there is no good return. They start to downsize and I think customers are more likely to look for people that can provide the service that has good driver capacity,” Gonzalez said.

Theodore Tollefson is a business reporter for the Post Bulletin. He is originally from Burnsville, Minn., and graduated from the University of Wisconsin-River Falls with a bachelor's degree in journalism in December 2020. Readers can reach Theodore at 507-281-7420 or ttollefson@postbulletin.com.
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