As his logging business expanded in the pine and hardwood forests of eastern Georgia, Jesse Hendley got into trucking. He scraped together the cash to gradually acquire seven tractor-trailers so that he could not only sell timber to mills elsewhere in the Southern United States, but also charge the mills for delivery.

Today, though, all seven rigs are parked. The soaring price of diesel fuel - more than $4.50 a gallon, or about $1.20 a liter, up from $2.50 a year ago - has stripped the profit from hauling.

If diesel prices do not decline and make that side of the business viable, Hendley says, he will have to sell his trucks - or try to sell them. That is just what thousands of other truckers are doing as they shed used rigs in what appears to be the biggest shakeout since trucking was deregulated in 1980.

"Most truckers are one major breakdown - a broken axle or a damaged engine - away from bankruptcy," said Hendley, who laid off his last driver this month and turned to independent operators to ship his logs.

The squeeze on truckers' profits from rising fuel costs is compounded by the slowing U.S. economy, which is reducing the amount of freight traffic. Truckers say they find it hard to impose fuel surcharges, as some other businesses have done, in part because their industry has suffered for years from overcapacity since deregulation drew thousands of small operators into trucking.

About 70 percent of U.S. freight tonnage moves over the highways on trucks, much of it in the diesel-powered tractor-trailers of the country's 350,000 independent operators, each with a fleet of up to five vehicles, one usually driven by the proprietor. Profit margins, notoriously thin in good times, are minuscule now, and each rise in fuel prices pushes more truckers into a losing situation.

More than 45,000 vehicles, or 3 percent of the U.S. trucking fleet, have disappeared from the highways since early last year, according to America's Commercial Transportation Research in Columbus, Indiana. That surpasses the last great shakeout, in the early 1980s, when deregulation, along with a recession, high interest rates and the second Arab oil embargo, took out 33,000 rigs.

While small operators like Hendley, of Millen, Georgia, appear to be bearing the brunt of the damage, carriers with at least five trucks are also going out of business at an accelerating pace. In the first quarter, 935 of these larger operators shut down, the American Trucking Association reports, up from 385 a year earlier and the highest quarterly failure rate since the 2001 recession.

"There are so many used trucks in dealer lots now that some of the larger dealers have stopped buying them," said James McCormack, whose Web site, TruckerToTrucker.com, markets used trucks. "From what dealers tell me, exports have become their best outlet, particularly to Russia."

His own site listed 1,250 new ads in April from owner-operators, up from 900 in March and 450 a year earlier. Many of the owners are no longer able to lay out $1,100 to fill a 250-gallon fuel tank, which they often need to do two or three times a week. The increased outlay for fuel more than eats up the earnings of many small operators once they meet their truck loan payments and pay for insurance, maintenance, tires and the like. "If the prices asked are low enough," McCormack said of the advertised trucks, "dealers will pick up single units and resell them."

Trucks are also going abroad. Nearly 24,000 used, over-the- highway rigs have been exported since early last year, the Commerce Department reports, or nearly three times the number in 2006. The weakness of the dollar makes the prices more attractive to foreigners and less so to potential domestic buyers.

U.S. air cargo carriers are also somewhat paring their operations. Northwest Airlines, for example, dedicated 13 giant 747- 200s to carrying freight between the United States and the Far East, a business that brought in $840 million last year, or 7 percent of the airline's total revenue. The price of jet fuel, however, has risen faster than freight rates, and Northwest recently shrank its cargo fleet to 12 planes.

The airline also dropped cargo service to Singapore and Bangkok, the least profitable markets, said Ben Hirst, a senior vice president, and soon will pull out of Taipei and Guangzhou.

"We are seeing demand falling while fuel costs have gone up faster than we can raise rates to cover them, despite 20 surcharges," Hirst said.

United Parcel Service notes a gradual shift among its customers to slower and less expensive ground shipments from air cargo service. "People are trading down because of our numerous fuel surcharges," said Norman Black, a UPS spokesman.

Adding surcharges that keep up with the rise in fuel prices is hardest for small truckers. Until the deregulation of interstate trucking, the U.S. government kept shipping rates high enough to cover trucking costs while limiting the number of truckers. After deregulation, thousands of trucks were purchased, largely on credit, by individuals who gambled that freight rates would stay high enough to cover their costs: loan payments, fuel, insurance, tires, repairs, food on the road, Social Security taxes, tolls, accountants and fees to brokers who obtain loads.

In time, fleets of fewer than 10 trucks, with the proprietor often driving one, carried much of the country's highway cargo.

"It's the Horatio Alger myth," said Michael Belzer, a professor of industrial relations at Wayne State University in Detroit who is a former truck driver. "These are people who want to be their own bosses in an occupation that is not always economically rational."

That marginal viability - rewarding owner-operators and many employed drivers with incomes that, even in good times, are less than $40,000 a year for 80 hours a week on the road - is disappearing. The lumber mills paid Hendley $3.25 a mile, or about $2 a kilometer, to bring his logs from the forests. But diesel fuel, which once had eaten up 25 percent of this revenue, in the end consumed 59 percent - not enough, he said, to cover other expenses and make a profit.