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Trucking advised to audit all drivers to limit CDL liability

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https://www.freightwaves.com/news/trucking-advised-to-audit-all-drivers-
to-limit-cdl-liability

Trucking and logistics companies should be taking immediate steps to 
mitigate increased exposure to drivers with non-domiciled commercial 
driver’s licenses – including an audit of all existing employee or 
contract drivers, a regulations expert advises.

That advice, included in a legal alert by Greg Reed, a partner at Hanson 
Bridgett LLP, comes in the wake of an emergency rule issued in September 
by the Federal Motor Carrier Safety Administration overhauling who is 
eligible for a non-domiciled CDL.

“Both the regulatory language in FMCSA’s interim final rule, as well as 
Secretary Duffy’s remarks at the press conference announcing it, cast 
doubt on the legitimacy of all non-domiciled CDLs,” Reed told FreightWaves 
in an interview.

“If that holds true, the liability and risk has already increased 
dramatically for any carrier using these drivers or a brokerage that works 
with those carriers.”

In the alert, Reed points out that if an accident were to occur, 
plaintiffs’ attorneys would likely argue that logistics and trucking 
companies are on notice that non-domiciled CDLs may be operating 
unlawfully and are insufficiently qualified.

“And non-domiciled CDL holders may find their licenses revoked in real 
time as the DOT and SDLAs conduct audits of current non-domiciled CDLs, 
which could result in a driver behind the wheel who lacks a commercial 
license.”

Steps that both trucking and logistics companies should be taking now, 
according to Reed, include:

Audit all existing employee or contract drivers to determine whether any 
are holding non-domiciled CDLs. Logistics and brokerage companies should 
engage with frequently used carriers to determine the scope of their 
exposure to non-domiciled CDLs.

Work with legal counsel to determine how to assess whether identified 
employee or contract drivers have the sufficient records to demonstrate 
that their CDLs will not be revoked based on ongoing and forthcoming 
audits.

Begin a process to limit utilization of these drivers until they have 
their non-domiciled CDLs confirmed or renewed.

Incorporate new or reinforce existing contractual language making clear 
that drivers must be properly licensed, have a lawful employment status, 
and qualified to operate a commercial motor vehicle.

Looming capacity shakeout
The heightened restrictions now governing eligibility for a non-domiciled 
CDL prompted FMCSA to estimate that 194,000 of approximately 200,000 
drivers holding those licenses will exit the market over two years as 
their CDLs become ineligible, representing roughly 5% of 3.9 million 
commercial drivers.

“Even though the regulatory language suggests that there will be a 5% 
reduction in capacity over two years, which it asserts will allow markets 
and fleets time to adjust, I potentially foresee capacity tightening to a 
greater degree over a shorter amount of time,” Reed told FreightWaves.

“While carriers are not necessarily going to let their non-domiciled CDL 
drivers go today, there will be pressure to immediately start phasing them 
out of the workforce. A carrier or broker is not going to want to expose 
themselves to the increased liability that comes with not knowing if these 
non-domiciled CDLs were validly issued in the first place.”

Some on Wall Street see the capacity attrition – and subsequent effect on 
rates – resulting from the CDL rule as “likely far more impactful” than 
the agency’s recent crackdown on English language proficiency violations.

“Capacity action, while meaningful, is mainly a late ‘26/early ‘27 
tailwind for the trucking group in our view,” wrote TD Cowen 
transportation analyst Jason Seidl in a research note following the 
emergency rule announcement.

“Enforcement is unlikely to be a material help for ‘26 bid season 
(upcoming imminently in late ‘25/early ‘26) but could begin to firm up 
spot rates in time for the following ‘27 bid cycle barring a deep economic 
slowdown. That said, upcoming capacity attrition should be on shippers’ 
minds this bid season, which could lead to attempts to pull forward some 
bids.”


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Trucking advised to audit all drivers to limit CDL liability "Leroy N. Soetoro" <leroysoetoro@americans-first.com> - 2025-11-25 01:18 +0000

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