Surging diesel fuel costs and U.S. consumer demand correction could lead to multiple owner-operator truckers exiting the industry if prices drop by 10% to 20%, Reuters reports as per Uber Technologies, Inc (NYSE:UBER) Uber Freight head Lior Ron.
High rates and desperate requests by shipping and carrier companies for more long-distance truckers attracted over 20,000 drivers into the market over the past few months, including 9,000 in February alone.
The trucking industry was 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, Reuters wrote.
There has been an unexpectedly sharp downturn in demand to truck everything from food to furniture since March beginning, and rates that deal in on-demand trucking jobs known as the spot market are skidding, Reuters reports.
The rates in the on-demand spot market dropped a further $0.30 on a per-mile basis in April, beating the typical seasonal decline.
The unexpectedly sharp downturn in the U.S. spot market has concerned investors about wider economic repercussions.
Uber Freight, which acts as a middle man connecting truckers with shippers, acquired logistics company Transplace boosting Uber Freight's Q1 revenue to $1.8 billion and reaching profitability on an adjusted EBITDA basis for the first time.
