Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. trucking downturn puts pressure on independent operators -Uber Freight

Stock Markets May 09, 2022 02:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Trucks get refueled at a rest stop providing essential food and hygiene services to truckers who continue to work amid the coronavirus disease (COVID-19) outbreak, in Las Vegas, New Mexico, U.S. March 23, 2020. Picture taken March 23, 2020. R

By Tina Bellon

(Reuters) - A continued decline in on-demand trucking prices risks squeezing out tens of thousands of small operator-owned trucking companies that rushed into the market when rates were surging earlier this year, Uber Technologies (NYSE:UBER) Inc's head of freight said.

Surging diesel fuel costs and a leveling of U.S. consumer demand meant many owner-operator truckers would have to exit the industry if prices drop by a further 10% to 20%, Lior Ron, head of Uber Freight, said in an interview.

Rates in the on-demand spot market, under pressure since early March, have dropped a further $0.30 on a per-mile basis in April, faster than the typical seasonal decline, Uber data showed.

"The first casualties are the small guys unfortunately, because the operational costs are higher so they're the first the first ones in and the first ones to go out", Ron said.

The unexpectedly sharp downturn in the U.S. spot market - which is used to handle demand peaks not covered by traditional trucking contracts - has investors worry about wider economic repercussions if the trucking slump depends and spreads.

Lured by high rates and desperate pleas by shipping and carrier companies for more long-distance truckers, more than 20,000 drivers entered the market over the past few months, including 9,000 in February alone, Uber data showed.

The trucking industry was now looking at produce season, underway in Florida throughout May, and beverage season during the summer to determine the impact on spot rates and driver supply, Ron said.

Uber Freight, which acts as a middle man connecting truckers with shippers, last year bought logistics company Transplace for $2.25 billion. That acquisition boosted Uber Freight's revenue in the first quarter to around $1.8 billion, and reached profitability on an adjusted EBITDA basis for the first time.

U.S. trucking downturn puts pressure on independent operators -Uber Freight
 

Related Articles

Amazon Tests TikTok Style In-App Feature - WSJ
Amazon Tests TikTok Style In-App Feature - WSJ By Investing.com - Aug 17, 2022

By Sam Boughedda Amazon (NASDAQ:AMZN) is said by The Wall Street Journal to be testing a feature that shows products in a TikTok-style photo and video feed. The feature being...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email