Trucking and logistics firms ought to be taking fast steps to mitigate elevated publicity to drivers with non-domiciled industrial driver’s licenses – together with an audit of all present worker or contract drivers, a laws professional advises.
That recommendation, included in a authorized alert by Greg Reed, a companion at Hanson Bridgett LLP, comes within the wake of an emergency rule issued in September by the Federal Motor Service Security Administration overhauling who’s eligible for a non-domiciled CDL.
“Each the regulatory language in FMCSA’s interim last rule, in addition to Secretary Duffy’s remarks on the press convention saying it, solid doubt on the legitimacy of all non-domiciled CDLs,” Reed instructed BigRig in an interview.
“If that holds true, the legal responsibility and threat has already elevated dramatically for any provider utilizing these drivers or a brokerage that works with these carriers.”
Within the alert, Reed factors out that if an accident had been to happen, plaintiffs’ attorneys would doubtless argue that logistics and trucking firms are on discover that non-domiciled CDLs could also be working unlawfully and are insufficiently certified.
“And non-domiciled CDL holders could discover their licenses revoked in actual time because the DOT and SDLAs conduct audits of present non-domiciled CDLs, which might lead to a driver behind the wheel who lacks a industrial license.”
Steps that each trucking and logistics firms ought to be taking now, in line with Reed, embrace:
- Audit all present worker or contract drivers to find out whether or not any are holding non-domiciled CDLs. Logistics and brokerage firms ought to have interaction with regularly used carriers to find out the scope of their publicity to non-domiciled CDLs.
- Work with authorized counsel to find out find out how to assess whether or not recognized worker or contract drivers have the ample information to exhibit that their CDLs won’t be revoked primarily based on ongoing and forthcoming audits.
- Start a course of to restrict utilization of those drivers till they’ve their non-domiciled CDLs confirmed or renewed.
- Incorporate new or reinforce present contractual language making clear that drivers have to be correctly licensed, have a lawful employment standing, and certified to function a industrial motorcar.
Looming capability shakeout
The heightened restrictions now governing eligibility for a non-domiciled CDL prompted FMCSA to estimate that 194,000 of roughly 200,000 drivers holding these licenses will exit the market over two years as their CDLs turn into ineligible, representing roughly 5% of three.9 million industrial drivers.
“Though the regulatory language means that there might be a 5% discount in capability over two years, which it asserts will permit markets and fleets time to regulate, I doubtlessly foresee capability tightening to a higher diploma over a shorter period of time,” Reed instructed BigRig.
“Whereas carriers aren’t essentially going to let their non-domiciled CDL drivers go immediately, there might be strain to right away begin phasing them out of the workforce. A provider or dealer just isn’t going to need to expose themselves to the elevated legal responsibility that comes with not realizing if these non-domiciled CDLs had been validly issued within the first place.”
Some on Wall Road see the capability attrition – and subsequent impact on charges – ensuing from the CDL rule as “doubtless much more impactful” than the company’s current crackdown on English language proficiency violations.
“Capability motion, whereas significant, is principally a late ‘26/early ‘27 tailwind for the trucking group in our view,” wrote TD Cowen transportation analyst Jason Seidl in a analysis word following the emergency rule announcement.
“Enforcement is unlikely to be a fabric assist for ‘26 bid season (upcoming imminently in late ‘25/early ‘26) however might start to agency up spot charges in time for the next ‘27 bid cycle barring a deep financial slowdown. That mentioned, upcoming capability attrition ought to be on shippers’ minds this bid season, which might result in makes an attempt to drag ahead some bids.”
Associated articles:
- Lawmaker desires to finish Mexico/Canada trucking reciprocity
- A number of CDL violations uncovered in Florida truck crash
- Watchdog targets FMCSA on English proficiency testing
Click on for extra BigRig articles by John Gallagher.
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