Immigration Crackdown and Trucking Capacity: What Fleet Owners Need to Know in 2025

The American trucking industry faced unprecedented regulatory changes in 2025 as the Trump Administration’s immigration enforcement policies targeted hundreds of thousands of commercial drivers. Many industry experts predicted these policies would trigger a severe capacity crisis and send freight rates soaring. Nearly a year into implementation, the reality has proven far more complex than anyone anticipated.

For trucking companies and fleet owners navigating these turbulent times, understanding the intersection of immigration policy, driver capacity, and market rates has become critical for business planning and risk management.

The Scale of Immigration Enforcement in Trucking

The numbers are staggering. According to analysis prepared for J.B. Hunt by Transport Futures, immigrants make up approximately 25% of the trucking workforce, with undocumented workers accounting for about 8% of all drivers. The administration’s enforcement programs target three distinct groups:

English Proficiency Requirements: New testing standards could disqualify drivers who cannot demonstrate basic English fluency. Transport Futures estimates this policy alone could remove 197,000 drivers from the workforce, representing roughly 20% of all immigrant drivers. This includes both U.S.-domiciled drivers and Mexican drivers operating under B-1 cross-border visas.

Documentation Checks: With 3.5 million roadside inspections conducted annually by the FMCSA, enforcement agents now verify immigration status during commercial vehicle stops. Undocumented drivers face immediate removal from service. After accounting for overlap with language requirements, this policy threatens an additional 252,000 drivers.

Non-Domiciled Status Revocations: Approximately 5% of the driver population holds temporary work documentation that employers secured when normal hiring markets proved insufficient. If these temporary authorizations are not renewed, the industry stands to lose another 167,000 drivers.

Combined, these three enforcement programs put 614,000 drivers at risk of disqualification, representing 16% of the total U.S. driver population of 3.9 million.

The Predicted Crisis That Didn’t Materialize

Industry analysts originally forecasted that removing 16% of driver capacity would create supply chain chaos reminiscent of the COVID-19 pandemic disruptions. The Transport Futures analysis warned that aggressive enforcement could push spot market prices 20% or more above normal levels, with contract rates rising 10-15%.

The prediction seemed reasonable. Previous regulatory changes that removed far fewer drivers, such as the Electronic Logging Device (ELD) mandate in 2017-2018 and Hours of Service (HOS) changes in 2013-2014, had triggered notable capacity crunches and price spikes. Immigration enforcement appeared poised to have an even more dramatic impact.

Yet as of mid-2025, the anticipated capacity crisis has largely failed to appear. Despite the ongoing immigration crackdown, the trucking industry remains mired in what analysts call the “Great Freight Recession of 2025,” now extending over 13 consecutive quarters of weak demand and depressed rates.

Why Rates Stayed Low Despite Driver Losses

Several factors explain why the immigration enforcement policies haven’t produced the predicted rate increases:

Overwhelming Excess Capacity

The pandemic boom of 2020-2021 lured thousands of new trucking companies into the market, creating a massive glut of trucks that persisted even as freight volumes declined. This oversupply proved so severe that removing hundreds of thousands of drivers barely made a dent.

Federal Motor Carrier Safety Administration data shows that carrier exits have indeed accelerated, with net operating authority revocations running 16% higher in early 2025 compared to 2024. However, this capacity reduction has been insufficient to overcome the enormous surplus created during the pandemic years.

Collapsed Freight Demand

While enforcement policies reduced driver supply, freight demand simultaneously collapsed. Long-haul truckload demand fell approximately 25% year-over-year in early 2025 as shippers increasingly shifted to intermodal rail options. Consumer spending pivoted from goods to services after the pandemic, and retailers found themselves overstocked, sharply curtailing new orders.

This demand destruction effectively neutralized the supply reduction. As one industry executive noted, if you remove immigration enforcement from the equation, “we are absolutely moving in the right direction,” implying that the policies may have prevented an even deeper rate collapse rather than causing rates to rise.

Geographic and Segmentation Effects

Immigration enforcement has not impacted the industry uniformly. Immigrant drivers concentrate heavily in specific regions (California, Texas, Florida, New Jersey, New York) and in particular fleet segments (small carriers, drayage operations, regional haulers serving immigrant-heavy shippers).

Large, well-managed national fleets with sophisticated compliance programs have been far less affected than small operators. This has accelerated consolidation as marginal carriers exit the market, but it hasn’t created the widespread capacity shortage that would drive broad rate increases.

Modal Shifts to Intermodal

As the immigration crackdown unfolded alongside persistently low truckload rates, many shippers discovered or rediscovered intermodal rail as a cost-saving alternative. By 2025, intermodal was reclaiming long-haul freight share that trucking had captured during the 2020-2021 capacity crunch.

Abundant container capacity and improved rail service made intermodal attractive for lanes over 700 miles. Some shippers even began using containers in transit as “rolling storage” to avoid high warehouse costs, extending freight cycle times but reducing reliance on over-the-road trucking.

Current Market Conditions: Where Rates Stand Now

Despite early optimism that the freight recession would end in 2025, the reality has been sobering. Key market indicators show:

Spot Rates: National dry van spot rates averaged approximately $2.04 per mile in early 2025, having finally found a floor after two years of decline. While this represents a modest improvement from the absolute bottom (rates are slightly higher year-over-year for the first time in many months), prices remain roughly 70 cents below the 2021 peak and near multi-year lows.

Contract Rates: These have proven stickier, hovering around $2.43 per mile for dry van freight. Contract rates have declined only 3-5% year-over-year, reflecting agreements locked in before the worst of the downturn. The current gap between contract and spot rates (approximately $0.39 per mile) continues to favor shippers, who maintain strong bargaining power.

Tender Rejection Rates: One positive signal for carriers is that tender rejection rates have crept up from record lows, rising above 6% in late 2024 and early 2025. While still historically low, this metric suggests carriers have regained slight leverage to refuse unprofitable freight as capacity slowly tightens.

Intermodal Pricing: With long-distance truckload rates depressed, intermodal has become increasingly attractive. Rail-based container shipping has grabbed back market share, particularly for transcontinental moves where it can undercut trucking rates significantly.

Insurance Implications for Trucking Fleets

The immigration enforcement environment creates several important considerations for fleet operators managing their commercial trucking insurance:

Heightened Compliance Risk

Carriers now face increased liability exposure if they employ drivers who are later found to violate immigration or English proficiency requirements. Should an accident occur involving such a driver, defense costs and potential judgments could escalate dramatically.

Working with an experienced insurance broker like Cogo Insurance can help fleet owners understand how compliance gaps might affect their coverage and liability exposure. Proper risk assessment becomes critical when regulatory requirements are in flux.

Driver Qualification Files

Insurance carriers are paying closer attention to driver qualification files and hiring procedures. Fleets that can demonstrate robust vetting processes, including verification of work authorization and language proficiency, may find more favorable underwriting terms.

Nuclear Verdict Concerns

The trucking industry already faces an epidemic of “nuclear verdicts,” with jury awards in accident cases skyrocketing. If plaintiffs’ attorneys can argue that a carrier knowingly employed drivers who violated federal requirements, these already catastrophic awards could grow even larger.

As the Transport Futures analysis notes, there is legitimate fear that “accident liability losses will increase if accidents involve immigrant drivers who have avoided disqualification.” This uncertainty adds costs to an industry already under pressure from rising insurance premiums.

Geographic Risk Variation

Insurance risk varies significantly by geography. Fleets operating heavily in states with large immigrant populations (California, Texas, Florida, New York, New Jersey) face different exposure than those focused on Sun Belt states with lower immigrant concentrations.

What Fleet Owners Should Do Now

Given the uncertain regulatory environment and depressed market conditions, fleet owners should consider several strategic actions:

1. Comprehensive Driver Audits

Review your entire driver roster to identify potential compliance issues before enforcement agents do. This includes verifying work authorization, assessing English language skills, and ensuring all CDL holders meet current federal standards.

2. Enhanced Hiring Procedures

Implement robust screening processes for new hires that go beyond minimum requirements. As Transport Futures notes, fleets now face a 16% reduction in their potential recruiting pool, making it critical to efficiently identify qualified candidates. Language testing and green card or passport verification should become standard practice.

3. Insurance Coverage Review

The changing risk landscape makes it essential to review your commercial trucking insurance coverage with a knowledgeable broker. Ensure your policies adequately address compliance-related exposures and that you understand any exclusions that might apply if drivers are found to be improperly qualified.

4. Diversification Strategies

Consider diversifying your freight mix to reduce exposure to segments most affected by immigration enforcement. Dedicated operations and regional hauls may prove more stable than long-haul spot market freight during this period of uncertainty.

5. Technology Investments

As the driver shortage intensifies over time, investments in efficiency-enhancing technology become more valuable. From route optimization to automated back-office functions, technology can help you do more with a potentially smaller driver pool.

The Long-Term Outlook: Recovery Timeline

While the immediate immigration enforcement impact has been muted by excess capacity and weak demand, the long-term effects remain concerning. Industry analysts warn of several scenarios that could still trigger the predicted capacity crisis:

The 2026 Whipsaw Risk

Many economists expected a recession in 2026, which would further depress freight demand and temporarily mask the driver shortage. However, Transport Futures warns of a dangerous scenario: if the economy recovers in 2027 just as immigration enforcement effects peak, recruiters would face rapidly climbing needs precisely when their budgets had been slashed during recessionary pressures.

This timing mismatch could create a severe whipsaw effect similar to late 2020 and 2021, which produced the most significant supply chain crisis in modern industry history. Fleet owners should prepare for potential volatility even if current conditions seem manageable.

Ongoing Recruiting Challenges

The 16% reduction in the recruiting pool creates a permanent headwind for fleet expansion. With average driver tenure around seven years, fleets must source approximately 16% of their drivers from outside the industry annually. Disqualifying 16% of potential candidates through immigration enforcement means fleets need to recruit an additional 98,000 drivers each year from their remaining sources.

This challenge intensifies during periods of low unemployment (like current conditions), when finding qualified candidates becomes even more difficult.

Regulatory Uncertainty

As the Transport Futures analysis notes, “What will the Administration propose next?” remains a critical question. Additional enforcement measures could still appear, and the specifics of English proficiency testing remain undefined. This uncertainty complicates long-term planning and creates additional costs for an industry already operating on razor-thin margins.

Regional Considerations for Fleet Operations

The impact of immigration enforcement varies dramatically by geography, creating strategic considerations for fleet operators:

High-Impact States

California, Texas, Florida, New York, and New Jersey have immigrant populations exceeding 20% of their workforce. Pennsylvania has significant immigrant concentrations in Philadelphia and agricultural regions. Fleets operating heavily in these states face the most acute challenges in maintaining driver capacity.

Importantly, these states represent major freight markets. California alone accounts for a massive portion of U.S. import/export activity, while Texas serves as a critical hub for both domestic freight and cross-border movements with Mexico.

Sector-Specific Exposure

Certain freight sectors employ disproportionately high numbers of immigrant drivers. Construction, manufacturing, and agriculture all have immigrant workforce shares above 20%. Fleets specialized in these sectors, particularly regional carriers serving immigrant-heavy shippers, face heightened vulnerability.

Drayage operations serving ports in Southern California exemplify this concentration. The immigrant driver population in this segment is particularly high, and enforcement actions could severely disrupt port freight movement.

Border Operations

The B-1 visa program allowing Mexican drivers to transport goods across the border faces enhanced scrutiny under the English proficiency requirements. Transport Futures estimates that about 25% of the 80,000 Mexican drivers crossing the border daily move beyond the immediate border area. Language testing could significantly impact cross-border freight flows.

Safety Considerations and Industry Debate

Proponents of stricter enforcement cite legitimate safety concerns:

Language Barriers: Drivers with poor English skills may struggle to read road signs, respond to police directions, or communicate clearly when requesting help. There are questions about such drivers’ comprehension during training.

Fraudulent Licensing: Evidence suggests some unscrupulous operators illegally obtain licenses for immigrant drivers who haven’t met proper qualifications.

Fleet Safety Culture: Immigrants are disproportionately represented in the smallest fleets and operations competing in low-price segments. These carriers sometimes lack vigorous safety cultures, providing inadequate training and pushing drivers to violate hours of service regulations.

The Transport Futures analysis suggests that “shifting such capacity to more responsible operations should have a positive effect on safety.”

However, critics counter that removing experienced drivers en masse could actually harm safety by forcing fleets to hire less qualified replacements or push remaining drivers harder. The ultimate safety impact remains debatable and will likely require years of data to assess properly.

Insurance Market Response

The commercial trucking insurance market has responded to these developments in several ways:

Premium Pressure Continues

Insurance premiums for trucking operations have skyrocketed in recent years, driven by nuclear verdicts, cargo theft scams, and rising equipment costs. The immigration enforcement environment adds another layer of uncertainty that insurers must price into their policies.

While weak freight rates and carrier bankruptcies have slightly eased some premium pressure (as capacity exits the market), rates remain elevated by historical standards. Fleet owners continue to face difficult insurance markets.

Underwriting Scrutiny Intensifies

Insurance carriers are conducting more thorough reviews of driver qualification procedures, hiring practices, and compliance programs. Fleets that can demonstrate robust processes may secure more competitive terms, while those with questionable practices face higher premiums or coverage restrictions.

Specialized Coverage Needs

Some insurance providers are developing specialized coverages or endorsements to address compliance-related exposures. Working with a broker like Cogo Insurance that understands these evolving products can help fleet owners secure appropriate protection.

Strategic Positioning for the Recovery

Despite current weak market conditions, history shows that trucking downturns always eventually end. Fleet owners who position themselves strategically during difficult periods emerge stronger when markets recover.

Operational Excellence

Use this period to optimize operations, improve driver retention, and build a reputation for reliability. When capacity does tighten, shippers will prioritize carriers they trust to deliver consistently.

Financial Resilience

Preserve cash, refinance equipment loans if possible, and avoid desperate moves that could undermine long-term stability. Carriers that maintain financial health during the recession will be positioned to capitalize when rates improve.

Shipper Relationships

Deepen relationships with core customers. In tight markets, shippers reward carriers who stood by them during weak periods. These partnerships become especially valuable when spot market capacity evaporates.

Compliance Excellence

Make compliance a competitive advantage rather than a burden. Fleets with sterling safety records, proper driver qualifications, and robust documentation will face fewer disruptions from enforcement actions and may command premium rates from risk-conscious shippers.

The Road Ahead: Key Takeaways

The immigration enforcement policies of 2025 have created uncertainty and disruption in trucking, but their ultimate impact remains unclear. Key points for fleet owners to remember:

Immediate Impact Muted: Massive excess capacity and collapsed demand have prevented the predicted rate spike, at least for now.
Long-Term Risk Remains: The 16% reduction in available drivers will eventually create capacity pressure, particularly if demand recovers while enforcement continues.
Geographic Variation: Impact varies dramatically by region and freight segment. Know your exposure.
Compliance is Critical: Robust vetting and qualification procedures protect against both regulatory and liability risks.
Insurance Review Essential: The changing risk environment requires careful review of coverage with an experienced broker.
Timing Uncertainty: Watch for the potential 2026-2027 whipsaw if recession gives way to recovery just as enforcement peaks.
Strategic Positioning Matters: How fleets navigate this uncertain period will determine their competitive position when markets normalize.

For fleet owners seeking guidance on managing insurance and risk in this complex environment, partnering with experienced professionals makes a critical difference. Cogo Insurance specializes in helping trucking companies navigate evolving regulatory requirements while securing comprehensive coverage at competitive rates.

The intersection of immigration policy, freight market dynamics, and insurance risk creates challenges that require careful navigation. But for well-managed fleets that focus on compliance, operational excellence, and strategic planning, opportunities exist even in uncertain times.

Frequently Asked Questions

How many truck drivers could lose their CDLs due to immigration enforcement in 2025?

Analysis prepared for J.B. Hunt estimates that up to 614,000 drivers (16% of the total U.S. driver population) could be disqualified through three main enforcement programs: English proficiency testing (197,000 drivers), documentation checks (252,000 additional drivers), and non-renewal of temporary work authorizations (167,000 additional drivers). These numbers represent the total at-risk population, though actual removals may occur more gradually.

Why haven’t freight rates increased despite removing so many drivers?

The predicted rate increases haven’t materialized because the trucking industry entered 2025 with massive excess capacity from the pandemic boom years. Additionally, freight demand collapsed, with long-haul truckload volumes falling approximately 25% year-over-year. The combination of oversupply and weak demand has kept rates depressed despite driver losses. Essentially, the market had so many excess trucks that removing 16% of drivers barely created tightness.

What is the Great Freight Recession of 2025?

The Great Freight Recession refers to an unprecedented downturn extending over 13 consecutive quarters of weak freight demand, low rates, and carrier struggles. Unlike previous freight recessions defined by sharp crashes, this one has been characterized by a prolonged grinding downturn. Spot rates hit multi-year lows while carrier bankruptcies accelerated, creating survival challenges across the industry.

How does the immigration crackdown affect trucking insurance rates?

The immigration enforcement environment creates additional compliance and liability risks that insurance carriers must consider. Fleets employing drivers who later prove to be improperly qualified face heightened exposure in accident litigation, particularly given the current epidemic of nuclear verdicts. Insurers are increasing scrutiny of driver qualification procedures, and fleets with strong compliance programs may secure better terms than those with questionable practices.

Which states are most affected by trucking immigration enforcement?

California, Texas, Florida, New York, and New Jersey face the most significant impact, as these states have immigrant populations exceeding 20% of their workforce. Pennsylvania also has substantial immigrant concentrations in certain regions. Fleets operating heavily in these states face greater challenges in maintaining driver capacity. Additionally, border operations and drayage at major ports (like Southern California) are disproportionately affected.

Will the driver shortage eventually cause freight rates to increase?

Most analysts believe that once current excess capacity is fully absorbed, the 16% reduction in available drivers will create upward pressure on rates. However, timing remains highly uncertain. Some experts warn of a potential whipsaw effect in 2026-2027 if economic recovery coincides with peak enforcement impacts. The long-term recruiting challenge (needing to source an additional 98,000 drivers annually from a smaller pool) suggests eventual capacity tightness.

What should fleet owners do to protect their businesses during immigration enforcement?

Fleet owners should conduct comprehensive driver audits to identify compliance issues, implement enhanced hiring procedures including language testing and work authorization verification, review insurance coverage with an experienced broker, consider freight mix diversification, and invest in efficiency-enhancing technology. Most importantly, making compliance a competitive advantage rather than viewing it as a burden will position fleets for long-term success.

How has intermodal rail benefited from trucking’s immigration challenges?

Intermodal rail has reclaimed significant market share as long-haul truckload demand fell approximately 25% year-over-year. With abundant container capacity, improved service, and rates that undercut trucking on lanes over 700 miles, intermodal has become increasingly attractive to shippers. Some companies are even using containers in transit as “rolling storage” to avoid high warehouse costs, further shifting freight away from over-the-road trucking.

What safety concerns are raised about immigrant truck drivers?

Enforcement proponents cite three main safety concerns: drivers with poor English skills may struggle to read road signs or communicate during emergencies; evidence suggests some operators illegally obtain licenses for unqualified immigrant drivers; and immigrants are disproportionately represented in small fleets with weaker safety cultures that sometimes push drivers to violate regulations. However, critics argue that removing experienced drivers en masse could harm overall safety by forcing fleets to hire less qualified replacements.

When is the trucking market expected to recover?

Analysts project a slow, gradual recovery extending into 2026 or beyond. While early 2025 brought hints of stabilization (spot volumes ticking up, modest rate increases in some lanes), a robust recovery remains elusive. The pace of carrier exits suggests the market is moving toward supply-demand balance, but economic headwinds, trade policy uncertainty, and ongoing regulatory pressures continue to cloud the outlook. Most experts advise carriers to focus on resilience rather than growth as the primary key performance indicator for 2025.