Uber Freight CEO says the shipping recession is at a new tipping point
The freight transport sector has faced a volatile year, with a series of bankruptcies as a result of diminished freight rates and a lack of cargo as demand waned, but Lior Ron, CEO of Uber 's logistics subsidiary Uber Freight, says the freight recession may be at a new "tipping point."

The reason is fuel prices.

Ron said Uber Freight is witnessing more carriers giving back lanes after bids, which could be an indicator of carriers unable to afford to run certain shipping routes.

"Low fuel prices earlier this year likely helped many carriers manage through low rates, but increasing fuel costs may be a tipping point for carriers operating with little to no margin," Ron said.

Shipper volumes are still down, and carrier rates are still depressed. And so far in Q4, he said Uber's team has observed carriers being more selective on the volume that they take in bids to remain profitable. Shippers, meanwhile, are being more selective on their carrier mix and have been leaning toward selecting carriers they think are stable and provide good service, Ron said.

Oil prices have come down from their recent peak, and global economic growth is projected to slow next year, but geopolitical risks remain high, from the Russia-Ukraine war to the emerging Israel-Hamas war in the Middle East. The World Bank warned in a report on Tuesday that record high oil prices could be reached if the conflict spreads beyond the Gaza Strip, and the price of crude able to rise as high as $157. Bank of America recently released a similar worst-case scenario forecast.

"Fraught with uncertainty" is how the International Energy Agency recent described the conditions in the oil market.

The World Bank's baseline case assuming there is no oil shock would result in an average price of $90 a barrel in the current quarter before crude heads lower in 2024 to an $81 average amid slower global growth.