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Enforcement Tightens Truck Capacity as Rates Show Early Lift
Executives Say Reduction Supports Improving Pricing Trends
Key Takeaways:
- Federal enforcement of non-domiciled CDL and English-language rules tightened truck capacity in the first quarter.
- Carrier executives said reduced supply contributed to higher spot rates and early bid-season momentum.
- Analysts noted continued regulatory pressure alongside economic factors could extend capacity tightening.
The trucking industry is seeing a potential supply-driven recovery that was bolstered during the first quarter by increased enforcement.
The Department of Transportation tightened regulations on non-domiciled commercial driver licenses with a final rule March 16 and increased English-language proficiency standards for professional drivers. The federal initiative was cited by carriers for helping to tighten supply while reporting earnings results.
“When our industry saw spot rates jump dramatically in 2021 and we had a push for immigration, this industry was targeted, and we had many people enter without much trucking experience,” Knight-Swift Transportation Holdings CEO Adam Miller said during his first-quarter investor call April 22. “That population is getting pushed out.”
Miller noted these drivers came with weak safety backgrounds and without proper training. He also pointed out that many were exploited by criminal schemes such as chameleon carriers, and ultimately were paid rates well below what could be viewed as livable wages. Miller, too, thinks more can be done to ensure only safe professional drivers get licenses.
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Miller
“We think Dalilah’s Law will help codify that into law, among other things,” he said, citing minimum insurance, ELP and drug testing as other factors. Dalilah’s Law is a bill to toughen English-language proficiency rules for commercial drivers.
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Werner Enterprises CEO Derek Leathers pointed out that the supply reduction is coming from fleets that are struggling to get through the freight downturn, as well as stepped-up enforcement.
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Leathers
“As the supply-and-demand dynamic tightens, we are seeing rate lift and early positive momentum in the bid season,” Leathers said during his first-quarter investor call April 28. “We expect pricing gains to continue with more meaningful improvement in the third and fourth quarters.”
Werner ranks No. 18 on the for-hire TT100 and No. 30 on the TT Top 100 list of the largest logistics companies.
The Q1 2026 U.S. Bank Freight Payment Index found that national shipment volume edged down 0.3% sequentially during the quarter, while shipper spending jumped 12.9%. This also marked the largest quarter-to-quarter spending increase since late 2020. On a year-over-year basis, shipments rose 0.6%, while spending climbed 21.8%. The report concluded that this reflected tighter capacity, higher rates and rising fuel surcharges.
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Crum
“The driver-availability reduction is real,” said John Crum, head of specialty equipment finance and leasing at Wells Fargo. “If you are overbalanced in drivers that lost their licenses, that impacts the ability of your business to stay viable, and we certainly saw some exits as a result.”
Supply and demand was becoming more balanced going into the second quarter, according to Crum. This was complemented by truck retail sales and orders trending below replacement levels, he noted. That resulted in carriers not exposed to enforcement actions benefiting.
“There’s some regional variances there depending on what state you’re at and where you’re recruiting drivers,” Crum said. “If you have the drivers and the ability to fill the lanes and the trucks, you’re in better shape than if you lost the drivers and have to park the trucks.”
Crum said this leaves demand as a lingering question, but even a small boost would be significant given the supply-side tightening that has occurred.
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Chan
“The ELP mandate is something that is being enforced more,” said Bruce Chan, managing director of global transportation and logistics at Stifel Capital Markets. “That’s probably happening a little bit slower. I think where you’re seeing more impact is on the non-domiciled CDL restrictions, and also the shutdown of the so-called fly-by-night driving schools.”
Chan has seen a mix of both the enforcement actions and more fundamental economic factors driving the trend. The more fundamental factors have been ongoing, he noted, but at a slower pace between insurance rates, general inflation and fuel prices. He expects these trends to accelerate though, alongside the enforcement actions continuing to ramp up.
“The regulatory, legislative and judicial pressure is not over,” Chan said.
