After the longest freight recession in modern history, the next recovery may be driven less by a demand surge than by regulators removing unsafe, fraudulent, and noncompliant capacity that should not have been competing in the market.
Entering 2026, capacity had contracted after 13 consecutive quarters of margin compression, carrier exits, and rate floors that repeatedly failed to hold. Spot rates were materially higher year over year. Unlike previous market tightenings led by consumer spending, inventory restocking, or manufacturing growth, this one had a credible supply-side explanation: trucks were leaving, and enforcement was contributing to the exit.
That is a positive and overdue development for carriers that maintain equipment, employ drivers correctly, carry proper insurance, pay taxes, and comply with safety rules.
A Heavily Regulated Industry With Almost No Enforcement
Trucking has extensive rules governing hours of service, weight, insurance, drug and alcohol testing, CDL qualifications, electronic logs, employment, and tax compliance. The stakes justify the regulation: an unqualified, fatigued, or uninsured driver operating a Class 8 tractor and 53-foot trailer creates a public-safety risk, not merely a business risk.
For decades, however, enforcement did not match the number of carriers and brokers operating across North America. Compliant companies absorbed the cost of following the rules while competing with a shadow market that did not.
Trucking has always been a heavily regulated industry. The problem was never the rules. It was the absence of anyone willing to enforce them at scale. The good ones suffered. The bad actors moved through this industry like a cancer.
The imbalance suppressed prices and wages, weakened safety, and rewarded operators that externalized risk. Compliant carriers priced their true cost; noncompliant carriers could bid below it.
The Free-est of Free Markets, With a Number To Prove It
The U.S. Department of Justice uses the Herfindahl-Hirschman Index to measure concentration. The scale runs from 0 for perfect competition to 10,000 for a monopoly. Markets below 1,500 are considered unconcentrated; levels above 1,800 draw merger scrutiny, and levels above 2,500 are highly concentrated.
For-hire truckload trucking is at the opposite extreme. The article cites more than 580,000 active motor carriers registered with the Federal Motor Carrier Safety Administration, the top 10 full-truckload carriers holding roughly 5% of revenue, and 97% of carriers operating 20 or fewer trucks. Its estimated HHI is only about 50 to 100 points.
By comparison, the U.S. parcel market, dominated by UPS and FedEx, has an estimated HHI above 3,600. Class I rail is above 2,000. Truckload barely registers.
In a market so fragmented that no participant can establish a price floor, the regulatory floor becomes the only floor. Removing enforcement does not create a free market; it creates an unregulated one.
Driver Inc.: A Canadian Name for a North American Problem
In Canada, the regulatory gap became visible through the Driver Inc. model. The term was coined by Shawn Baird, founder and CEO of Sharp Transportation Systems in Cambridge, Ontario. In November 2018, Baird launched driverinc.ca to inform drivers of their rights before incorporating under carrier pressure.
The model classifies drivers as independent contractors operating through personal incorporated entities, or Personal Service Businesses, rather than as employees. When those drivers use company equipment, follow company routes, and work under company dispatch, the arrangement functions as employment despite its form.
Misclassification removes employment protections, eliminates payroll obligations for the carrier, and permits rates a compliant competitor cannot match. Although the Driver Inc. label is Canadian, U.S. tax and labor agencies use similar tests to distinguish a true independent contractor from a misclassified employee.
Chameleon Carriers: The American Mirror Image
In the United States, chameleon carriers accumulate safety violations, close, and return under a new DOT number with a clean record. Congress directed FMCSA to develop the ARCHI detection system in 2012, but the registration structure still allowed bad actors to disappear and reappear.
A Government Accountability Office analysis cited in the article found that crashes involving carriers with chameleon characteristics caused 217 deaths and 3,561 injuries over five years. Such carriers were about three times more likely to be involved in serious crashes than legitimate new entrants.
FMCSA’s MOTUS registration system is intended to replace 40-year-old infrastructure by verifying physical locations, strengthening identity checks, and connecting compliance histories across related entities. The SAFE Act, introduced in February 2026, would direct FMCSA to use automated tools to detect chameleon applications when they are submitted.
English Language Proficiency: A Standard That Existed on Paper
Federal law has long required commercial drivers to converse with law enforcement, understand highway signs, and complete required documentation in English. In 2016, however, FMCSA guidance told inspectors not to place drivers out of service for English Language Proficiency violations, largely removing the consequence.
An April 2025 executive order reversed that approach. The Commercial Vehicle Safety Alliance added English proficiency to the North American Standard Out-of-Service Criteria effective June 25, 2025. Drivers who cannot understand an officer or respond intelligibly may now be placed out of service, and translation applications are not accepted as a substitute.
After enforcement began, the article reports more than 19,000 violations and over 5,000 out-of-service orders. Analysts estimated that English-proficiency enforcement combined with non-domiciled CDL restrictions could remove 5% to 12% of CDL holders, or approximately 214,000 to 437,000 drivers, from the active U.S. pool over two to three years.
FMCSA Administrator Derek Barrs summarized the safety rationale:
“The ability to read road signs, understand safety instructions, and communicate effectively, when that standard is applied inconsistently, it creates risk, not only to the public but to the professional drivers operating alongside someone who may not fully understand the critical instructions.”
For carriers that have always hired to the full qualification standard, enforcement removes a cost advantage built on a safety deficit.
Non-Domiciled CDLs: A Credentialing System Described as Broken
The English-proficiency action is connected to a broader federal review of non-domiciled commercial driver’s licenses. Transportation Secretary Sean Duffy described the existing system as “absolutely 100 percent broken” and a national emergency.
In September 2025, FMCSA issued an immediately effective interim final rule after reviewing state issuance procedures and identifying serious noncompliance. The agency cited at least five fatal crashes involving non-domiciled CDL holders in the first months of 2025.
California had issued more than 60,000 non-domiciled CDLs in the prior year, with an estimated 15,000 issued improperly. The review found credentials issued without adequate immigration-status checks, in-person verification, or a process to revoke the license when work authorization expired.
Under the new rule, eligibility is limited to H-2B, H-2A, and E-2 visa holders. Issuance and renewal must be verified in person against federal databases, and the credential expires at the end of work authorization or after one year, whichever occurs first. The proposed Secure Commercial Driver Licensing Act of 2025 would impose additional restrictions and require recertification of current holders.
David Heller of the Truckload Carriers Association described the broader change:
“Whether it’s entry-level driver training facilities or motor carrier compliance, English language proficiency or non-domiciled CDLs, there is a flavor of enforcement that is coming out of the agency that is certainly welcome, and it is one that we have been asking for, for years.”
Electronic Logging Devices: When the Compliance Tool Becomes the Fraud
ELDs were mandated in 2017 to replace paper logs with tamper-resistant records of hours of service. The implementation allowed manufacturers to self-certify that devices complied with federal specifications, without independent testing or a government audit of functionality.
A market emerged for devices and third-party services designed to alter records. Some services reportedly offered to add driving time or erase hours-of-service violations for as little as $30 per week. Inspectors documented records shifted backward by days and as much as 21 hours of driving concealed on a trip.
The competitive effect was significant. Compliant carriers generally ran about 2,000 to 2,500 miles per truck per week within legal limits. Carriers using manipulated logs could run 3,500 to 5,000 miles.
The article compares an estimated $2.38 per mile for a compliant van carrier with $1.65 per mile for an operator avoiding payroll taxes, benefits, insurance, and ELD compliance costs: a $0.73-per-mile gap. For a 10-truck fleet running 3,500 miles per week, that difference exceeds $1.3 million annually.
In 2025, FMCSA revoked 42 noncompliant ELDs and blocked 238 self-certification applications, a 62% increase in annual revocations. CVSA added ELD tampering to the out-of-service criteria effective April 1, 2026, allowing an immediate 10-hour order when falsification is confirmed.
The article also cites the Triton Logistics ghost-driver case, in which an overseas operation managed phantom drivers for a U.S. carrier after a scheme had already contributed to three deaths on Interstate 64 in Virginia.
The Self-Certification Problem: 40 ELDs to 1,100
About 40 devices appeared on the registered list when the ELD mandate took effect. The list later exceeded 1,100, not because the technology advanced at 30 times the rate, but because a manufacturer could submit a form and certify its own compliance.
The weakness resembles fraudulent CDL schools: a credential appears legitimate because it came through an official process, even when the process itself has been compromised. A registered ELD can satisfy the paperwork while being designed to falsify records.
Even independent testing is only a point-in-time control. Software can change through a firmware update after certification. Effective oversight would require continuing monitoring, version reporting, update logs, and a way to verify device state during roadside inspection.
What This Means for the Market Ahead
Compliant carriers survived 13 quarters of margin pressure while paying costs that other operators shifted to drivers, the public, and crash victims. Enforcement was advancing on several fronts at once:
- MOTUS was strengthening carrier registration and exposing related entities.
- The SAFE Act sought automated chameleon-carrier detection.
- Canadian authorities were building permanent Driver Inc. enforcement.
- English proficiency had become an out-of-service standard.
- Non-domiciled CDL issuance was being rebuilt.
- More than 7,000 fraudulent CDL training providers had been removed from the federal registry.
- ELD tampering had become an immediate out-of-service trigger, while 42 devices had been removed from the approved list.
These changes were beginning to remove capacity that had priced below cost through noncompliance. Spot rates were already materially higher year over year.
For carriers that operated legally throughout the downturn, the regulatory floor they had always included in their pricing was finally being applied more broadly. The article calls on those carriers to support legitimate enforcement and report illegal activity. A smaller market built on consistent rules should also be safer and more economically sustainable for operators that ran clean businesses.