A research report from Noel Perry, principal of consulting firm Transport Futures, found the Trump administration’s immigration-focused enforcement actions could result in the removal of more than 600,000 truck drivers, or about 16% of the total U.S. driver population.
Perry’s analysis, prepared for J.B. Hunt Transport Services, concluded that the “immigration effects seem more powerful” than the 2017 electronic logging device rule. He also warned that, based on recent history, fleets should be more concerned with the pace of disqualifications than with how many drivers are removed.
The worst-case scenario is “a near-term recession reducing capacity, followed by a recovery just as immigration restrictions reach maturity,” Perry said.
Analysis focuses on three major immigration enforcement policies
English proficiency: The Trump administration intends to revoke the CDLs of any driver who cannot pass a basic English proficiency test. This test would apply to both U.S.-domiciled drivers and Mexican drivers transporting goods under the B-1 cross-border program. Analysts estimate that almost 5% of drivers would fail a language test. That estimate equates to 20% of immigrant drivers. If so, this policy would subtract 197,000 drivers.
Documentation: The administration is directing governmental agents who inspect a commercial vehicle to verify the driver’s immigration status. Undocumented drivers will be removed from service and referred to immigration officials. Should all be identified, 314,000 would depart trucking. However, an estimated 20% of those drivers would already be disqualified by the English language requirement, leaving a net disqualification for improper documentation at approximately 250,000 drivers.
Non-domiciled CDLs: Approximately 5% of the driver population has such documentation, with varying amounts of time remaining before expiration (all within two years). If those documents are not renewed, the industry would lose another 167,000 drivers, net of language disqualifications.
Future of one policy in limbo after court ruling
Earlier this month, a U.S. federal appeals court paused enforcement of DOT’s emergency final rule on non-domiciled CDLs.
The lawsuit challenging the rule was filed just after Perry compiled his findings, but he noted in the report that the likelihood of multiple court challenges made it difficult to assess just how many commercial drivers ultimately are removed, and at what pace.
Perry said that in late 2017, when capacity utilization reached 100% in spot markets, prices rose 16% above normal. In 2021, under pressure from the supply chain crisis following COVID-19 shutdowns, spot prices rose 34% above normal levels.
Immigration enforcement could put the market beyond the 2017 experience, leading to prices 20% or more above normal. “The aggressive pursuit of the administration’s policies could create a crisis approaching that magnitude,” Perry said.
In mid-October, even before the lawsuit challenging the non-domiciled CDL rule was filed, J.B. Hunt was among the fleets already noticing a change.
“More recent regulatory developments and more importantly, regulatory enforcement, are having an impact on capacity,” Spencer Frazier, J.B. Hunt’s executive vice president of sales and marketing, said on a conference call. “The capacity bubble may be deflating as we speak.”
During Mullen Group’s conference call at the end of October, Chairman and President Murray Mullen said he was closely monitoring developments in the United States. He expressed concern about the fallout if the Department of Transportation attempted to remove hundreds of thousands of existing truck drivers all at once.
Mullen suggested it would “really tighten the market” in the United States, and as a result, the market would also tighten in Canada.
Fleets should prepare now for future driver recruiting
Looking ahead, Perry predicted an eventual freight rebound and stepped-up regulatory enforcement will necessitate a substantial increase in recruiting needs for fleets. That’s because the same regulations that are removing drivers today will add more paperwork and stricter testing requirements for new drivers in the future, making the recruiting process less efficient.
Likewise, these productivity challenges will also affect driver training schools, enforcement organizations, and driver licensing agencies. “If the [immigration] program progresses slowly, even though it eventually achieves its goals, the capacity and recruiting challenge can be met,” Perry said.
However, he warned trucking could be headed for a repeat of the “whipsaw effect” of late 2020 and 2021, when the pandemic led to “the most significant supply crisis in industry history.”
Perry added the immigration crackdown will not be felt uniformly throughout the United States. Larger cities in California, New Jersey, New York, Florida, and Texas all have immigrant populations near or above 20%, and have been targeted by law enforcement.
“Such locations will certainly feel the strongest effects of immigration restrictions, especially those blue states where the administration is concentrating its efforts,” Perry said.
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