Trucking’s Hidden Crisis: Policy, Inflation and Illegal Practices

Pete Amundson
5 days ago
5 min read

After nearly 3½ years of flat or falling freight, the U.S. trucking industry finds itself in the worst slump in memory. This isn’t just a normal market cycle – it’s a crisis of many causes. As ATA President Chris Spear recently admitted, “this is the third straight year the industry is feeling the pain of a freight recession” (truckinginfo.com). Industry data back this up: freight volumes and rates have been stagnant while costs keep rising. For example, ATA reports full-year truck freight in 2024 totaled 11.27 billion tons, down from 11.41 billion tons in 2023 (topworldwide.com). In my 20 years in trucking I’ve never seen a downturn so prolonged and complex. It’s clear the cause isn’t just a drop in consumer demand – policy choices and illegal practices have choked our recovery (as experts like ATA’s economist Bob Costello now confirm (trucknews.comreuters.com).

Several key factors have combined into a “perfect storm” squeezing the industry:

New Tariffs and Trade Uncertainty: In early 2025 the administration imposed broad import tariffs that jolted the supply chain. Shippers front-loaded orders, driving an artificial volume spike, but now demand is collapsing. Reuters reports that after trucking “stocked up ahead of President Trump’s tariffs, the bounce-back that the industry hoped for is at risk” (reuters.com). In fact, analysts now expect 2025 freight tonnage to be roughly flat with 2024 (reuters.com). Knight-Swift CEO Adam Miller says just talking about tariffs “paused the momentum” in the freight market (reuters.com). In short, our recovery was stifled by policy – we can’t ignore that trade-war uncertainty has made carriers and shippers very cautious.
Inflation and Rising Costs: Even as freight levels fell, operating costs surged. ATA and ATRI data show carriers are paying more than ever per mile. Insurance premiums alone jumped about 12.5% in 2023 and another ~3% in 2024 (truckinginfo.com). ATRI noted truck finance & trailer costs are up 52% since 2019 (truckingdive.com), with finance payments at a record 39¢/mile in 2024 (truckingdive.com). Driver benefits (healthcare, etc.) likewise hit record highs (truckingdive.com). As one CEO bluntly put it, “the trucking industry is facing the most challenging freight market in years, with loads down and costs increasing” (truckingdive.com). In this environment even a small load can be unprofitable – many smaller carriers simply can’t cover costs, so they fold. The net effect is a choke point: carriers struggle to operate, rates languish, and freight isn’t magically re-entering to fill the void.
Illegal CDLs and Cabotage: A hidden culprit is the widespread abuse of licensing and cabotage rules. A federal audit found a “catastrophic pattern” of states illegally issuing CDLs to foreign drivers (transportation.gov). For example, California alone had over 25% of its non-domiciled CDLs improperly issued, some valid long after a driver’s legal status expired (transportation.gov). This opened the door to thousands of unsafe, undocumented drivers on our roads. Similarly, carriers have long exploited loopholes by keeping Mexican B-1 visa drivers in the U.S. to run domestic loads (called cabotage). The ATA began pushing for a crackdown on this practice in 2025 (fleetowner.com). Enforcement is finally coming: border authorities detained dozens of drivers for cabotage, and nearly 100 Mexican drivers had visas revoked in one weekend for illegal hauling (fleetowner.com). These “bad actors” effectively oversupplied the market with cheap labor. Cracking down on cabotage and non-domiciled licenses is shrinking capacity now, not adding it. As ATA’s Chief Economist Bob Costello explained, the Trump administration’s new focus on ELP and illegal CDLs is “slowly removing capacity,” and an expected crackdown on cabotage “should benefit U.S. trucking fleets” (trucknews.com).
Supply vs. “Shortage” of Drivers: Ironically, all this turmoil means we don’t have too few drivers in total – we have too many who don’t meet standards. ATA economists now bluntly say the driver “shortage” is about quality, not quantity (ccjdigital.com). Costello noted that recent carrier failures are the only realistic path to rate recovery (trucknews.com). He pointed out that more than 39,000 carriers and 49,800 drivers have already left the industry from 2022 highs (ccjdigital.com). That’s the market correcting itself by shedding marginal operators. As Costello put it, “we’re not advocating for massive new drivers… we’re enforcing the rules so everybody’s safe. And if you can’t abide by those rules, you shouldn’t be on the roads” (ccjdigital.com). Spear made the same point: “there’s never been a lack of people with CDLs. What we lack… is qualified drivers who meet our high standards” (ccjdigital.com). In practice, carriers simply cannot hire their way out of this slump – they can only survive by tightening standards and exiting unprofitable capacity. In fact, Costello quipped, “I just told you we had way too much supply for the amount of demand”(ccjdigital.com).

Taken together, these facts paint a different picture than the usual “supply and demand cycle.” This freight recession wasn’t purely organic. It’s been deepened by policy missteps (tariffs, lax enforcement), macro pressures (inflation, costs), and illicit practices (illegal CDLs and cabotage). We need honest talk about these root causes rather than soft-pedaling them. The fix isn’t gimmicks or hiding from the issue, it’s tackling each head-on: strengthen enforcement of cabotage and CDL rules, advocate for stable trade policy, and invest in driving the best candidates with better pay and training. Only by aligning capacity with real demand and standards will trucking get back on track.

In the end, I’ve spent two decades watching this industry. The data and expert testimony back up what we’ve all felt on the ground: the last 3+ years of freight depression look more like a crisis contrived by outside forces than a normal downturn (reuters.comccjdigital.com). The question isn’t just “when will freight come back?” – it’s “how do we fix the problems that kept it down?” If we don’t address the tariff shock, inflation and illegal driver issues, the recovery will be that much slower. It’s time to call out these factors and advocate for real solutions – enforcement, investment, and common sense – so the industry can thrive again on its own merits.

Key takeaways:

The trucking industry has endured an extended freight recession driven by factors beyond simple market cycles.
2025 tariffs and trade uncertainty “paused momentum” and threaten to keep 2025 volumes flat compared to 2024.
Inflationary costs (fuel, equipment, insurance, wages/benefits) are up sharply, squeezing margins while freight demand is weak.
Illegal CDLs/cabotage have added hidden capacity. Recent audits found many foreign drivers licensed improperly, and enforcement is now removing them.
Capacity correction, not a driver shortage, is the solution. ATA’s economists stress enforcing rules to eliminate unsafe drivers. Tens of thousands of carriers and drivers have already exited, and “qualified” talent, not sheer numbers, is what the industry needs.
If we’re honest, we’ll address these core issues. Only then can supply and demand finally come back into balance and get America’s freight moving again.