New Visa Rules are Shrinking North American Trucking Capacity

Cross-border trade is a foundational piece of the North American economy. The cross-border supply chain generates approximately $1.6 trillion in annual land trade between the U.S., Canada, and Mexico.

However, today, the industry is undergoing a serious structural contraction. Rather than a normal cyclical downturn, trucking capacity is shrinking due to a sudden convergence of federal immigration reforms, including strict non-domiciled licensing restrictions, strict English-language mandates, and provincial regulatory crackdowns spanning from Washington, D.C. to Ottawa, Canada.

To keep the supply chain moving fluidly and sustain potential growth in the current constrained environment, executives now have to choose between fragile transportation models. Today, navigating the changing regulatory environment requires a thorough understanding of federal compliance frameworks, rigid driver deficit modelling, and a keen understanding of the new visa landscape. These include border transloading, cross-border intermodal failure integration, and more.

Visa regulations have been stirring anxiety in the North American trucking industry, and while these regulations seem to be putting a chokehold on the industry, having a good understanding of the sector can help you avoid pitfalls. This is why NAD Logistics is here: to help you understand how the complexities of new visa rules are reducing trucking capacity across North America.

U.S. Regulatory Policy Matrix: Visa Restrictions and Federal Enforcement

The constriction of Commercial Motor Vehicle (CMV) driver capacity in the United States comes from a coordinated, multi-agency enforcement push targeting non-domiciled drivers (persons who do not have their permanent legal home or primary residence in the respective province, state, or country). Designed to enhance highway safety and restore integrity to commercial driver credentialing, these regulatory actions have reshaped the operational landscape for motor carriers and enterprise shippers. 

Understanding the Department of State’s Work Visa Pauses and What They Mean for Employers and Workers 

On August 22, 2025, the U.S. Department of State implemented an indefinite pause on approving specific employment-based work visas for foreign commercial truck drivers. Effectively, constraints have been placed on foreign employees operating or handling trucks and cargo shipments, creating the potential for multiple bottlenecks and unfilled jobs due to increased policy limits. 

But why is this happening? 

According to reports, this pause has been spurred by the broader U.S. government effort to strengthen oversight of foreign commercial truck drivers and address concerns about safety measures tied to relying on overseas workers, licensing, and immigration enforcement. These changes are designed to ensure that any drivers entering the U.S. to work meet the appropriate federal requirements before they’re allowed to operate commercial vehicles. 

While these efforts are well-intentioned, the industry relies heavily on foreign workers to manage quotas and meet delivery deadlines, causing immediate operational strain across the supply chain. Because immigrants account for approximately 34% of all workers in Canada's broader transportation sector, these policy changes are creating a severe bottleneck at the Canada–U.S. border. 

The issue is not one-sided and involves a range of complex factors that have long been points of discussion in U.S. and North American politics. While foreign workers help fill important gaps in the trucking industry, these policy changes also aim to address broader concerns about regulatory compliance, safety, and enforcement. That said, these policies will still have a significant impact on the industry. 

FMCSA Restrictions on Non-Domiciled Commercial Driver's Licenses 

Alongside the ongoing foreign visa pause, the Federal Motor Carrier Safety Administration (FMCSA) issued an emergency interim final rule on September 26, 2025. 

This rule was later codified and refined through a final rule that took effect on March 16, 2026, placing stricter limits on how state driver licensing agencies issue and renew non-domiciled Commercial Driver’s Licenses (CDLs) and Commercial Learner’s Permits (CLPs). This narrows the window of eligibility for drivers who are moving freight across the border. 

Mandatory Out-of-Service Enforcement for Drivers Who Do Not Meet English Language Proficiency Requirements 

One of the more challenging components of these changes, and one that has caused an uproar among the public, is enforcing the requirement that drivers pass English Proficiency tests. According to the Federal Motor Carrier Safety Regulations (under 49 CFR § 391.11(b)(2)), commercial vehicle drivers are required to speak and read English sufficiently to appropriately converse with the "general public," comprehend highway traffic signs, respond to official local inquiries, and complete the required shipping reports and logs.  

Historically, roadside enforcement of this requirement has been inconsistent and rarely had an impact on operations. That leniency has ended.  

After an executive order in April 2025, the FMCSA and Commercial Vehicle Safety Alliance (CVSA) formally reinstated English Language Proficiency (ELP) violations under the North American Standard Out-of-Service Criteria, effective June 25, 2025. 

With this framework in place, law enforcement often conducts standardized conversational and sign-comprehension assessments during routine roadside inspections. If a driver is unable to demonstrate functional English literacy without translation assistance, the inspector must issue an immediate "Out-of-Service" (or OOS) order, prohibiting the driver from operating a commercial vehicle. 

The impact of this enforcement was immediate. Reports show that between June 25 and September 24 of 2025, the federal and state inspectors recorded more than 19,000 ELP violations, with more than 5,000 resulting in immediate OOS driver removals. 

For context, Statistics Canada reports that approximately 690,000 Canadians, or about 1.9% of the total population, cannot speak either English or French, Canada’s two official languages. While that overall percentage may seem small, when combined with the sector’s heavy reliance on immigrant labor (34% of the broader Canadian transportation workforce and 18% of all employed truck drivers worldwide), this requirement represents a direct threat to North American trucking capacity. 

Strategic Logistics Optimization: Reducing Supply Chain Risk and Supporting Business Growth 

To keep the supply chain moving smoothly and protect service reliability during capacity declines, enterprise shippers and logistics providers are transitioning away from what are now considered “high-risk” operating models. Navigating cross-border freight requires evaluating three primary operational models: Direct Through-Trailer, Border Cross-Docking/Transloading, and Cross-Border Intermodal Rail. 

Direct Through-Trailer Service

Under a direct through-trailer operational model, freight is loaded into a single commercial trailer. It remains in a sealed unit as it crosses international borders and arrives at its final destination. This model offers advantages for specific freight profiles, providing fast transit times, minimizing physical handling to two touchpoints (origin load and destination unload), and significantly reducing cargo damage.

The complication here is that if an international driver fails an ELP roadside screening or violates cabotage rules, the driver or vehicle can be placed “out of service,” leaving the freight in limbo until a compliant replacement driver is available. Additionally, finding a fully compliant cross-border driver can be expensive, adding another layer of cost to an already difficult situation. 

Border Cross-Docking and Transloading Strategy

Cross-docking and transloading involve moving freight to a secure warehouse near major border crossings, such as Laredo, El Paso, or Harlingen. Once there, the cargo is unloaded from the original trailer, inspected, and transferred onto a compliant domestic carrier’s trailer for the next leg of its journey.

The trade-offs associated with transloading include additional physical cargo handling, a minor risk of product damage, and additional hours of border warehouse dwell time. Regardless, transloading can still be an effective operational solution for transporting dry bulk goods, generalized consumer products, and multi-stop distribution networks.

Integrating Cross-Border Intermodal Rail Transportation

Cross-border intermodal rail transfers 53-foot intermodal containers across several international borders through dedicated infrastructure overseen by the Intermodal Marketing Company (IMC). Intermodal rail provides structural insulation meant to protect against highway enforcement disruptions.

The big advantage is that because the long-haul portion of the shipment moves by rail rather than truck, cabotage rules, driver Hours-of-Service limits, and highway ELP roadside inspections don’t apply to that part of the journey. Local drayage at the origin and destination is handled by domestic truck drivers operating within their own countries, while intermodal rail can provide scalable, C-TPAT-certified capacity at a lower cost for long-haul routes over 750 miles. 

NAD Logistics: Specialists Who Can Help You Navigate Difficult Transit Issues

For more than 30 years, NAD Logistics has helped customers navigate the ever-changing world of transportation and logistics. Originally founded in 1991 as part of the Kelron Logistics Group of Companies, which later became XPO Canada, NAD Logistics has built its reputation on reliable service, industry experience, and a commitment to delivering value for its customers. 

When mandates and expectations change and offer unique challenges within the transport industry, it’s easy to feel helpless and alone in managing the process. However, NAD Logistics has the experience and operational agility to help you navigate these issues. You don’t have to approach these problems alone; our team will find solutions on your behalf and support current and future mandates across the U.S. and North America. Contact us today.