Trucking Industry Watch (Q2): Part 2

In Part 1 of our Industry Watch series, we discussed several of the changes on the horizon for the trucking industry, primarily driven by the actions of the new U.S. presidential administration. In Part 2, we continue to explore additional regulation changes as well as market trends that may soon be impacting fleets, as outlined by Gary Falldin, Sr. Director of Industry Solutions at Platform Science.

View Part 1 of the series now.

Independent Contractor Ruling

In March 2024, the U.S. Department of Labor revised its guidance on classifying workers as employees or independent contractors under the Fair Labor Standards Act (FLSA). This rule — which impacts trucking and other industries that rely on independent contractors — reverted to a  more stringent test to classify someone as an independent contractor.

The previous standards used to classify were generally viewed as more favorable to businesses and particularly the trucking industry's owner-operator model. The 2024 rule soon faced legal challenges from trucking companies and other businesses, who argued that it was in excess of the DOL's statutory authority. 

The DOL is now backing off the 2024 ruling, and, while it currently remains in effect, the DOL has indicated that it will not be enforcing it during a period of review and reconsideration. Instead, the division will rely on the principles outlined in Fact Sheet 13 and the reinstated Opinion Letter FLSA2019-6 to classify independent contractors until legal and regulatory questions are resolved.

Cabotage Concerns

Cabotage refers to the restriction of domestic freight hauling within a country to that country's own trucking companies and drivers. This means that foreign-based carriers are generally prohibited from transporting goods between two points within a country's borders.

According to the ATA, some drivers from Mexico (and some American trucking companies) are intentionally skirting cabotage laws by misusing the B-1 temporary business visitor visa, effectively taking trucking jobs away from American drivers. While this is reportedly happening all over the U.S., it is especially prevalent at the U.S. southern border. 

The ATA points out that not only is cabotage illegal, it can also have significant economic and labor impacts on law-abiding motor carriers operating in the U.S. This misuse can lead to overall lower driver wages, a dangerous undercutting of rates and regulations, and no guarantee of safety standards and training for foreign drivers.

In April 2025, the ATA sent the Trump administration a letter asking it to prioritize the issue immediately, urging it to work with the Homeland Security and Customs Enforcement to better patrol violations of international drivers operating domestically with a B-1 visa, and the carriers employing them.

Market Trends 

Operational Costs 

The trucking industry continues to experience some concerning market trends, as operational costs have outpaced freight rates, creating a challenging environment for carriers. While contract and spot market rates have seen a decrease, operational costs — including driver pay and truck prices — have significantly increased. There have been some potential positive signs in contract rate negotiations in early 2025, but overall, the industry faces a dilemma of rising expenses and stagnant rates.

Freight Recession 

The ongoing freight recession has now lasted for more than 28 months, making it longer than previous recessions. The recession can be attributed to a shift in consumer spending patterns from goods consumption during COVID to an increased spending on experiences, leading to lower freight volumes at a time when trucking capacity had increased.

Tariffs and Industry Outlook

Heavy-duty trucks are currently excluded from tariffs, which is a positive aspect for the industry. However, there is concern about potential tariffs on the materials used to manufacture trucks, which could still drive up costs.

Regulatory Updates

Speed Limiters and Safety Fitness 

The proposal for speed limiters, with differentiated speeds based on safety equipment, is still under consideration.  In 2022, the FMCSA proposed a rule that heavy-duty CMVs  in interstate commerce that are equipped with an electronic engine control unit (ECU) capable of governing the maximum speed be required to limit the CMV’s speed to a rate determined by the FMCSA, and to maintain that ECU setting for the service life of the vehicle. 

The FMCSA had planned to release the Speed Limiter Ruling in May of 2025. When the FMCSA announced the proposal, it received more than 15,000 comments in response, with the majority coming from truck drivers who are opposed. Conversely, many trucking associations have supported a speed limiter rule. As of now, FMCSA has not released their ruling nor have they given an updated date of release.

The Safety Fitness Determination process is also being reviewed for potential streamlining, with discussions around moving from three to two determination categories, though many in the industry prefer to maintain three. The final rule is expected to be published in 2025, however no specific date has been provided.

Hair Testing and CSA Changes 

The trucking industry continues to support hair testing as a more effective method for detecting drug use in drivers. Proponents argue that hair testing offers an extended detection window, often up to 90 days. Additionally, hair testing is more difficult to manipulate compared to urine samples. The FMCSA has stated that it cannot grant this request until the Department of Health and Human Services (HHS) establishes guidelines for hair testing, a process that has been delayed multiple times.

Carriers can also expect changes to the Compliance, Safety, Accountability (CSA) program, including combining drug and alcohol violations in the  Unsafe Driving BASIC, adjusting severity weights, and increasing thresholds for Fitness and Hazmat Alerts. Additionally, changes are in the works for Maintenance BASIC, with proposals potentially differentiating Maintenance Violations between driver and company violations.

Federal Excise Tax 

The Federal Excise Tax (FET), first enacted in 1917 to help pay for World War I, is a 12% tax on the sale of most new heavy-duty trucks that remains to this day. This tax adds a significant cost and discourages fleet modernization to safer, more fuel efficient trucks. There is currently a bipartisan effort in the House to repeal this tax.

The Importance of an Industry-Connected Provider

When choosing a fleet management provider, it’s key to consider how it stays connected to the trucking industry, including keeping customers and products prepared for any changes and developments that may be coming soon. Additionally, understanding how a provider conducts updates and training for new regulations should be among the questions you ask potential providers.

Read more: 6 Secrets of Fleet Management Software Buyers

‍Go back to read Part 1 of the Industry Watch.

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