U.S. Department of Transportation (DOT) Secretary Sean P. Duffy recently announced an emergency interim final rule to restrict non-domiciled commercial driver’s licenses (CDLs), causing significant disruption to the trucking and supply chain industries. Issued by the Federal Motor Carrier Safety Administration (FMCSA) on September 29, 2025, the rule targets widespread abuse in the issuance of these licenses to immigrants. The rule requires states to immediately stop issuing new non-domiciled CDLs, but creates a two-year phase-in period before all non-domiciled CDLs are invalidated.
Non-domiciled CDLs, originally planned in 2017 to allow drivers residing in one state to obtain a license in another, have evolved to include non-U.S. residents, sometimes without appropriate work permits. A DOT audit found that at least 200,000 such licenses had been issued, with more than 25 percent in California granted improperly.
In March 2019, FMCSA provided regulatory guidance indicating that foreign drivers with an unexpired work permit or passport and CBP arrival/departure registration could obtain non-domiciled CDLs. However, many states have not verified permits or aligned expiration dates, leading to fraud and safety concerns.
The growth of these licenses coincided with an explosive increase in trucking capacity, contributing to the longest freight recession in history due to a glut of truck drivers.
USPS Implementation and Quick Reversal
A few weeks ago, the United States Postal Service (USPS) implemented a policy prohibiting loading contractors using drivers with non-domiciled CDLs, aligning with evolving federal immigration and transportation guidelines. Facilities have been instructed not to load trailers pulled by these drivers as part of efforts to improve safety within a network of asset carriers and brokers performing local, regional and transnational work.
The impact of this policy was immediate, leading to load cancellations and widespread disruptions. USPS operations, heavily dependent on these drivers, have seen missed trips and delayed sorting, exposing vulnerabilities in the postal transportation network.
Within days, the USPS reversed the ban, ruling that the impacts on service and costs were too severe for abrupt change. This highlighted the critical role non-domiciled drivers play in reliable mail delivery.
Key Leadership Points
Pete Routsolias, USPS senior vice president of logistics, addressed providers in a phone call, explaining the reversal: “We didn’t understand the magnitude of the number of people using non-domiciled CDLs, and quite honestly, the number of omissions was astronomical. And at this time, I’m not prepared to have such a negative impact on the service.” He added: “What we are announcing is that from now on you can start using non-domiciled CDL drivers again,” while emphasizing that other rules, such as English proficiency and two drivers per truck, still apply.
Initially, the USPS anticipated a delayed ban until January 1, but supplier reluctance has led to speculation that a full ban currently has an uncertain implementation date.
The proliferation of non-domiciled CDLs among immigrants has caught many seasoned trucking industry executives off-guard. For years, the trucking industry has been trying to understand why capacity has increased so substantially.
Since the FMCSA allowed foreigners to obtain a non-domiciled CDL in March 2019, more than 200,000 have been issued. During the same period, the trucking industry added more than 310,000 trucks, flooding the market with far too much capacity.
Due to the massive increase in highway transportation capacity, the trucking industry suffered the longest downturn in history, which we dubbed the Great Freight Recession. This freight recession began in March 2022 and has continued unabated since. The main culprit: a vastly oversupplied trucking market. Eliminating the pool of non-domiciled CDLs will have a significant impact on the freight market as these drivers leave the service. After all, depending on how many non-domiciled CDLs are currently active and moving freight, this could wipe out more than 5% of all truckload capacity in the market.
The Administration’s other policies, including the English Language Proficiency Rule (ELP), could have a significant impact on capacity over time as truck drivers who do not speak, read, or understand English are placed out of service. An insurance executive at a major agency suggested that at least 10% of truck drivers on the road would fail an inspection if they were tested on their English proficiency.
With all the regulatory pressure to exclude truck drivers who have a non-domiciled CDL or are not proficient in English from the industry, a capacity shortage could arise sooner or later.
