But that raises the question: Who is hiring these drivers in the first place?
And more broadly: Is it just too easy to start a trucking company?
That question leads straight to chameleon carriers and new entrants, problems that have plagued the industry since deregulation in 1980.
The Rise of Chameleon Carriers
When the Federal Motor Carrier Safety Administration declares a carrier an “imminent hazard” and shuts it down, the same pattern appears again and again: usually very small trucking companies that either don’t understand federal safety regulations — or simply ignore them.
No safety programs, no drug testing programs, no maintenance programs, no driver background checks, and so on.
Many that are shut down by FMCSA or lose their insurance simply pop up again under a different identity. These “chameleon carriers” or “reincarnated carriers” may take over an existing DOT number to avoid new-entrant scrutiny, or register the company under a family member’s name while the same people remain behind the scenes.
New-entrant carriers and chameleon carriers are getting some long-overdue attention.
Deregulation Opened the Door to New Trucking Companies
The Motor Carrier Act of 1980 deregulated trucking to increase competition and lower costs. For decades before that, the Interstate Commerce Commission tightly controlled who could enter the market, which routes they could serve, and how much they could charge.
Deregulation dramatically lowered barriers to entry. It helped create today’s competitive truckload market and allowed many carriers to thrive. But it also opened the door to a constant wave of new operators — far more than regulators could keep up with.
Research has long shown a “safety learning curve” for new motor carriers, with startups experiencing higher crash rates and more regulatory violations during their first two years.
Trying to make those newbie trucking companies safer has been an ongoing concern.
New Motor Carriers Face a Safety Learning Curve
In the Motor Carrier Safety Improvement Act of 1999, Congress ordered the Department of Transportation to make new entrants prove they understand the safety rules. That same law created the Federal Motor Carrier Safety Administration.
In 2012, during the MAP-21 highway reauthorization, Congress again tried to address the problem. It told the DOT to establish a proficiency exam for motor carriers seeking to enter the business.
But FMCSA never implemented the exam. Instead, it relies on a safety audit during a carrier’s first year of operation through FMCSA’s New Entrant Safety Assurance Program.
In practice, agency data shows barely half are completed on time, largely because the number of new entrants has overwhelmed enforcement resources.
Each year, roughly twice as many trucking companies enter the industry as regulators can audit.
Could Higher Insurance Requirements Slow Unsafe Entrants?
In 1985, Congress passed a law requiring motor carriers to maintain at least $750,000 in liability insurance or reserves. That number hasn’t changed in more than 40 years. It would need to be about $2.3 million today.
In 2012, Congress called for the agency to address the insurance issue. That resulted in an FMCSA report to Congress two years later, which found that insurance minimums needed to be reevaluated. But rulemakings have gone nowhere.
Can FMCSA’s Motus Registration System Stop Reincarnated Carriers?
One thing that seems close to reality is Motus, FMCSA’s overhaul of its carrier registration system.
The new platform, rolling out this year, will replace the agency’s patchwork of aging databases with a single system for registering carriers, applying for authority, and updating company information.
By tying registrations more closely to verified individuals and business entities and improving how the agency checks addresses and ownership information, FMCSA hopes to spot chameleon carriers earlier and get more insight into new entrants.
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