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McLeod urges rate discipline as freight market rebalances
While stricter enforcement has removed excess capacity, fleets must contend with higher operating costs and lingering uncertainty
“Proceed with all deliberate haste and keep in mind that the ground underneath us is shifting,” McLeod said. (Seth Clevenger/Transport Topics)
Key Takeaways:
- McLeod Software CEO Tom McLeod said Sept. 14 in Nashville that freight rates rebounded as excess trucking capacity diminished.
- McLeod attributed capacity reductions partly to stricter safety enforcement while warning that diesel, insurance, equipment, driver pay and maintenance costs increased.
- McLeod urged carriers to maintain rate discipline, control costs, improve efficiency and strengthen vetting as broker liability, cargo theft and cyberthreats evolve.
NASHVILLE, Tenn. — A long-awaited rebound in freight rates has improved the fortunes of motor carriers this year, but the founder and CEO of McLeod Software advised fleets to maintain rate discipline and carefully manage costs as the market recovers.
Tom McLeod cited many factors that are reshaping the transportation business, including ramped-up enforcement of safety regulations, climbing operational expenses, adoption of artificial intelligence and uncertainty on diesel prices, trade deals and interest rates.
“There are going to be opportunities. Some of these issues are going to help weed out your competition,” McLeod said Sept. 14 at the transportation management software developer’s 2026 user conference. “Proceed with all deliberate haste and keep in mind that the ground underneath us is shifting. There are changes happening that aren’t going to go back.”
As for the freight market, McLeod said the industry is riding a rate rebound driven by the winnowing of excess freight hauling capacity that had contributed to a four-year rate recession.
“We’ve reached the point of equilibrium,” he said. “Freight rates are up, and the reason is we have the right number of trucks in the road.”
Much of that capacity reduction can be attributed to stricter enforcement of existing safety regulations, McLeod said, mentioning the Department of Transportation’s crackdown on inadequate commercial driver license schools, renewed enforcement of English-language proficiency and efforts to ensure that drivers are legally in the country.
“The irony is, if these regulations had been enforced all along, the rate recession would not have been nearly as deep, not nearly as long,” McLeod said. “I hope we’ll remember that and not fall into that same trap in the future.”
As freight rates have increased, so, too, has the cost of doing business in trucking.
By early September, the average U.S. retail diesel price had climbed to $5.967 per gallon, according to the Energy Information Administration.
Insurance costs are “through the roof,” largely driven by nuclear verdicts, McLeod said.
On top of that, new truck prices are increasing with the Environmental Protection Agency’s tougher nitrogen-oxide emission standards going into effect in 2027.
Driver pay and maintenance expenses are also up.
Given those pressures, carriers should only accept freight that covers their costs and provides an acceptable margin.
“It’s more important than ever to maintain rate discipline,” McLeod said.
Meanwhile, legal cases are also changing the playing field in transportation.
Tom McLeod, CEO of @McLeodSoftware, discusses the supply-driven freight market recovery at #McLeodUC26: “We’ve reached a point of equilibrium. … We have the right number of trucks on the road.” pic.twitter.com/mPN4ITnR4r
— Seth Clevenger (@SethClevenger) September 14, 2026
McLeod cited the U.S. Supreme Court’s recent Montgomery v. Caribe Transport II ruling, which removed a legal defense for freight brokers accused of negligent carrier hiring.
Legally, brokers are being asked to walk “a very fine line” by carefully vetting the carrier but not supervising the driver as an employer would, he said.
McLeod defended the role of brokers, saying they make the industry more viable for small carriers and help shippers navigate the specialized skills and requirements needed to transport different types of freight.
“I believe the freight brokerage part of our industry is vital to really keeping things lubricated and keeping freight moving,” he said.
In addition to broker liability concerns, the increasing sophistication of strategic cargo theft is also elevating the importance of carrier vetting processes.
Arpan Podduturi of Samsara examines how AI, telematics and onboard cameras are converging to protect drivers and reduce risk. Tune in above or by going to RoadSigns.ttnews.com.
“Fraud is rising to a new level,” McLeod said. “The bad guys are getting better at their jobs.”
On the cybersecurity front, the rash of ransomware attacks that gripped the industry a few years ago appears to have eased to some degree, but McLeod warned that hackers using the latest AI tools could generate another wave of security threats.
On the whole, McLeod advised attendees to “be careful” but seek out opportunities in a changing industry.
“Maintain rate discipline, understand your costs, find the places where you can improve efficiency and lower your costs,” he said. “That can give you an advantage in the marketplace.”
