O’Malley’s Market Minute – July 2026

Why Freight Rates Are Rising Without a Demand Surge

The freight market is sending mixed signals.

Spot rates have climbed to some of the highest levels we’ve seen in years, creating optimism across the trucking industry. Traditionally, rising rates are tied to stronger freight demand and increased consumer spending. But this time, the story appears to be different.

In the latest episode of O’Malley’s Market Minute, O’Malley explores a market being shaped less by growing demand and more by shrinking supply.

A Supply-Side Story

While freight volumes have shown pockets of improvement, many of the economic indicators typically associated with a freight recovery remain subdued. Consumer sentiment continues to face pressure, and inflation remains a concern for households and businesses alike.

Yet rates continue to climb.

The biggest factor may be the significant reduction in trucking capacity over the last several years. Following one of the longest and most challenging freight downturns in recent memory, many carriers have exited the market, unable to sustain operations amid rising costs and compressed margins.

As O’Malley explains, trucks have effectively been “on sale” for years. Today’s market is beginning to reflect the true cost of providing transportation services.

The Cost of Trucking Has Changed

Operating a truck has never been more expensive. Equipment costs, insurance, maintenance, labor, and regulatory expenses have all increased, putting pressure on carriers throughout the industry.

For many fleets, freight rates had fallen below sustainable levels for an extended period. What we’re seeing today may not be a dramatic market recovery, but rather a correction as rates move back toward levels that better reflect the realities of operating costs.

In other words, the floor is rising.

What About New Truck Orders?

One development attracting attention is the recent increase in Class 8 truck orders.

While those numbers may suggest optimism in the industry, it’s still too early to determine what they mean for overall capacity. Some of these orders could represent growth and expansion, while others may simply be replacing aging equipment already in service.

The key question remains: will demand grow fast enough to absorb any new capacity that enters the market?

What Shippers Should Watch

As bid season approaches in late Q3 and early Q4, shippers should be having proactive conversations with their transportation partners.

The current market environment suggests that transportation costs could continue to rise, particularly for organizations with significant spot market exposure. Understanding carrier expectations, capacity commitments, and long-term network strategies will be increasingly important as contracts come up for renewal.

Looking Ahead

The most significant opportunity for further rate growth would come from a true demand-side recovery—one driven by increased consumer spending and stronger freight volumes.

If that occurs while capacity remains constrained, carriers will be in a stronger position to protect margins and invest in sustainable operations.

For now, the freight market’s strength appears to be rooted in supply rather than demand, making this one of the more unique market cycles the industry has experienced in recent years.

Watch the latest episode of O’Malley’s Market Minute below for a deeper look at what these market shifts could mean for shippers, carriers, and drivers. 🚛📈