O’Malley’s Market Minute | March 2026

In the latest episode of O’Malley’s Market Minute, Shaun breaks down the current state of the freight market, offering a clear-eyed look at the forces shaping both supply and demand. From tight trucking capacity to tepid consumer spending, here’s a full rundown of what he covered.

Supply Side: Capacity Remains Tight

The supply side of the freight market continues to tighten. According to the Federal Reserve’s FRED database tracking All Employees in Truck Transportation, truck payrolls are declining, and overall capacity in the marketplace is at levels not seen in a very long time. Capacity exits (carriers leaving the market) remains a real and ongoing trend. With fewer trucks available, the foundation is being set for a potential rate-cycle shift, but the timing depends heavily on what happens to demand.

Demand Side: Still Stuck in the Basement

Despite the tight supply picture, demand remains stubbornly weak — what Shaun calls “sticky.” Several indicators paint a sobering picture:

• The Cass Freight Index — tracked on FRED — is sitting at levels reminiscent of 2008.
• Housing starts continue to stagnate, offering little boost to freight volumes.
• Consumer sentiment, while ticking up slightly, is still at levels comparable to the recessions of the 1980s — hardly a signal that people are eager to spend on goods.

Adding to the concern, 401(k) hardship withdrawals are on the rise, with Business Insider reporting that Americans are tapping their retirement savings at elevated rates — a sign of mounting financial stress among consumers. Meanwhile, the Bureau of Economic Analysis’s Personal Income and Outlays report for December 2025 shows that consumer spending leaned heavily toward services rather than goods. The problem? Services don’t require trucks. When people spend on dining out, healthcare, or entertainment instead of physical products, freight demand simply doesn’t follow.

What This Means for Rates

The mismatch between tight supply and weak demand is creating an interesting dynamic in the spot market. With fewer trucks on the road, any short-term demand spike, such as weather-related disruptions, sends spot rates climbing sharply. DAT’s national van rate trendlines show the shipper-to-broker spread collapsing to levels not seen in the past year, generating optimism across the industry.

However, Ali urges caution about reading too much into spot rate movement when it comes to contract rates. Shippers have enjoyed low rates for an extended period and have little incentive to give up that leverage quickly. For contract rates to sustainably rise into the next cycle, the market will need to see consistent improvement across multiple demand indicators: consumer spending, housing, and manufacturing.

Without that broad-based demand recovery, the freight market is likely to remain in a pattern of lurching from one disruption to the next, spot rates spiking on weather events or short-term supply shocks, then pulling back again.

The Bottom Line

The freight market is in a delicate position. Supply is the tightest it’s been in years, but demand simply isn’t there to sustain a rate recovery. Until consumers start spending more on goods, housing picks up, and manufacturing strengthens, carriers should expect continued volatility rather than a clean breakout.

To every driver navigating these challenging conditions: thank you, and stay safe out there.