Supply Chain Shifts: New Regulations & Driver Shortages Threaten Freight Capacity

By Kathleen Cook

As the echoes of pandemic-era supply chain disruptions fade, a new set of challenges is emerging for freight transportation in North America. While port congestion has eased, a confluence of stricter regulations and a longstanding driver shortage is threatening freight capacity, shifting the focus from bottlenecks to a potential lack of trucks to move goods.

Industry analysts and transportation providers are bracing for a potentially significant impact, particularly as the peak shipping season approaches. While the situation isn't a repeat of 2021’s port gridlock, the nature of the current challenge—a potential lack of capacity rather than blockage—could prove equally disruptive.

A Perfect Storm of Regulations

The Federal Motor Carrier Safety Administration (FMCSA) has recently implemented and intensified several regulations impacting the trucking industry. Two key areas drawing concern are restrictions on non-domiciled commercial driver's licenses (CDLs) and stricter enforcement of English language proficiency (ELP) requirements for drivers.

Previously, non-domiciled CDLs allowed foreign-based drivers to operate commercial vehicles in the U.S. However, a new FMCSA rule, aimed at strengthening security and safety, significantly limited eligibility. While a court has temporarily halted full implementation, the uncertainty remains. “The initial rule would have eliminated around 200,000 drivers from the pool,” notes one industry source. “Even with the stay, it creates instability and forces companies to reassess their staffing strategies.”

Simultaneously, the FMCSA is aggressively enforcing ELP standards, resulting in a dramatic increase in drivers placed out of service for failing to meet the requirements. Data shows a more than 500% increase in ELP-related violations in recent months. “We're seeing a significant number of drivers, particularly in border states, being taken off the road for this,” explains a transportation broker. “It’s a growing concern, and the impact is starting to be felt across the network.”

The Persistent Driver Shortage

These new regulations come on top of an already existing and longstanding driver shortage. The American Trucking Associations (ATA) estimates the current shortage at around 60,000-82,000 drivers, and projects it could exceed 170,000 by 2030. The ATA has warned that 1.2 million new drivers will be needed over the next decade to replace retiring drivers and meet growing demand.

While recent BLS data shows some positive employment numbers in the truck transportation sector, revisions to past data suggest the available workforce is actually lower than initially estimated. “The numbers are misleading,” says one logistics executive. “The ‘revolving door’ of new CDL holders who quickly leave the profession is a persistent issue. Simply issuing more licenses doesn't solve the underlying problem.”

Impact on Freight Capacity & Rates

The combined effect of these factors—new regulations and a chronic driver shortage—is putting significant pressure on freight capacity. While not yet leading to widespread delays, transportation providers are reporting tighter capacity in certain lanes and increasing difficulty finding drivers.

“We’re seeing spot rates begin to creep up in some markets,” says a freight broker specializing in cross-border shipments. “The combination of fewer available drivers and increased regulatory scrutiny is creating a supply-demand imbalance. Shippers need to be prepared for potential rate increases and longer lead times.”

Experts warn that the situation could worsen during the peak shipping season. “If these challenges aren’t addressed, we could see significant disruptions in the coming months,” says a supply chain consultant. “Shippers should proactively engage with their carriers, explore alternative transportation modes, and consider diversifying their supply chains.”

What's Being Done & What's Next?

The trucking industry is actively seeking solutions to address these challenges. The ATA is advocating for policies that attract and retain drivers, such as improved training programs, increased compensation, and better working conditions. The FMCSA is reviewing its regulations to ensure they are both effective and reasonable.

The industry is also exploring technological solutions, such as autonomous trucking and platooning, to help mitigate the driver shortage and improve efficiency. However, these technologies are still in their early stages of development and are unlikely to provide immediate relief.

The outcome of the legal challenge to the non-domiciled CDL rule will be a key factor in determining the future of freight capacity. The FMCSA’s approach to ELP enforcement will also be crucial.

“The next few months will be critical,” says a transportation analyst. “The industry needs to adapt quickly to these new realities. Proactive planning and collaboration will be essential to navigate these challenges and ensure the smooth flow of goods.”

Ultimately, the shifting landscape of the North American supply chain demands a new level of resilience and adaptability. The days of simply relying on increased capacity to overcome challenges are over. Shippers, carriers, and regulators must work together to build a more sustainable and reliable freight transportation system.