H.R. 5688 Explained: CDL Crackdowns and What It Means for Brokers

H.R. 5688 doesn't come out of nowhere—it mostly locks FMCSA's September interim rule on non-domiciled CDLs into statute, even though that rule is currently stayed in court. If you run California or New York freight, depend on port drayage, cross-border, or produce lanes, or work heavily with small fleets and immigrant-heavy carrier bases, the combination of regulation, politics, and a slowly tightening market is now a core business risk, not background noise.

Key Takeaways for Freight Brokers

• H.R. 5688 would codify FMCSA's September interim rule on non-domiciled CDLs into permanent law, making the framework much harder to unwind later—even though the current rule is stayed in court.
• California is already living the future: roughly 17,000 non-domiciled CDLs are being revoked, with more under review, and USDOT has cut over $30M in safety grants over English-proficiency disputes.
• RXO's Curve report points to a "grind-it-out" Q4 2025, but ongoing carrier exits plus new licensing constraints set the stage for meaningful tightening in 2026 if demand rebounds.
• Tender rejections are already at last year's peak, a classic early warning that capacity is tightening in key lanes right into Christmas.
• Modern brokerages are treating immigration, licensing, and tariffs as structural lane risk—tagging carriers and lanes in their TMS by risk type, tightening vetting, and scenario-planning for chronic shortages in specific regions.
• ARK TMS is designed for small teams (1-25 users) who need to track carrier compliance, tag lane-level risk, and document vetting processes without enterprise complexity.

Who This Is For

Ideal reader:

• U.S. freight brokerages with 1-50 employees
• Teams running California or New York freight
• Brokers who depend on port drayage, cross-border, or produce lanes
• Operations working heavily with small fleets and immigrant-heavy carrier bases

Who can skip this:

• Asset-based carriers without brokerage operations
• Large enterprise brokerages with dedicated legal and compliance teams
• Companies not operating in affected states or lane types

H.R. 5688 and the Non-Domiciled CDL Reset

H.R. 5688 would codify FMCSA's September 2025 interim rule on non-domiciled CDLs into permanent statute, making the framework harder to unwind through courts or future administrations. The bill restricts when states can issue CDLs to non-domiciled individuals and tightens eligibility around lawful status, work authorization, and document verification.

What the Bill Actually Does

H.R. 5688, the Non-Domiciled CDL Integrity Act, was introduced in October and is currently sitting in the House Transportation and Infrastructure Committee's Highways and Transit subcommittee.

In plain English, the bill would:

• Amend Title 49 to restrict when states can issue CDLs to non-domiciled individuals (people not domiciled in the U.S. or in a CDL-issuing state)
• Tighten eligibility around lawful status, work authorization, and document verification—essentially baking key parts of FMCSA's September interim final rule into statute rather than leaving them as agency policy

The September 29 interim final rule (IFR) from FMCSA already:

• Sharply limited who can get a non-domiciled CLP or CDL
• Required immigration status verification through SAVE, with stricter document standards
• Linked CDL validity more tightly to the underlying immigration/work authorization dates

That IFR has been administratively stayed by the D.C. Circuit, so for now most states are operating under the old rules, except for those under corrective action plans (notably California).

FreightWaves analysis argues that H.R. 5688 mostly codifies what FMCSA already tried to do in the IFR, rather than going materially further—but it would make that framework much harder to unwind later.

Where the Definitions Get Messy

Policy fights here are mostly about definitions and edge cases, like:

• Who exactly counts as "non-domiciled" for CDL purposes
• Which immigration categories are eligible
• Whether a state's CDL expiration can ever go past a work authorization date

Legal analysts have noted that FMCSA framed parts of the IFR as merely "underscoring existing rules," while states like California argue that some of those requirements are new obligations, not clarifications.

If H.R. 5688 passes in its current form, that ambiguity gets locked into statute first, and the courts will sort out the details after—with your carrier base caught in the middle.

Why This Is Not Just "Driver Politics" for Brokers

For small and midsize brokerages, this isn't an abstract immigration debate. It hits you through:

• Fewer eligible drivers long term in markets that rely on immigrant labor (ports, border crossings, produce, some intermodal)
• Higher churn in carrier driver rosters as non-domiciled CDLs come under review or expire
• More complex compliance conversations with shippers who want to avoid getting pulled into legal or reputational risk

If you run California port drayage, cross-border freight, or dense metro work, treat H.R. 5688 as the policy backbone behind the crackdowns you're already seeing. This is structural risk to your lane-level capacity, not a one-week headline.

California and New York: Where This Is Getting Real First

California and New York are ground zero for non-domiciled CDL enforcement. California has already seen roughly 17,000 CDLs revoked with tens of thousands more under review, while USDOT has pulled over $33 million in safety grants from the state over English-proficiency enforcement disputes. New York faces similar pressure.

California Sues Over Pulled Safety Funds

USDOT recently terminated more than $33 million in commercial vehicle safety grants to California, arguing that the state isn't enforcing federal English-proficiency rules for truck drivers. California has now sued, saying its rules already match federal standards and that pulling the money is arbitrary and harmful to safety.

At the same time, USDOT has threatened similar action against New York, tying funding to how aggressively states enforce the new regime for non-domiciled CDLs and English-language requirements.

17,000 CDLs Revoked (and More Under Review)

Separate but related: DOT and FMCSA have ordered California to revoke about 17,000 non-domiciled CDLs that an audit found out of compliance, with tens of thousands more licenses under review.

Key points:

• The federal audit found systemic failures in California's non-domiciled CDL program, including licenses that extended past the holder's authorized stay and documentation gaps.
• Notices to these drivers give them around 60 days before revocation if they cannot provide acceptable documentation.
• Immigrant and legal advocacy groups report significant confusion among drivers about whether they can keep working and what documents are needed.

In practice, this can sideline thousands of drivers in one state that's already critical for U.S. freight: the ports, I-5 corridor, cross-border, and intermodal hubs all lean heavily on immigrant labor.

What Brokers Should Actually Expect in CA and NY

Over the next 3–6 months, brokers moving California and (to a lesser degree right now) New York freight should expect:

• Choppy capacity: Sudden drops in availability as carriers purge noncompliant drivers or pull back from certain work
• Weird pricing: Some carriers will chase volume aggressively to compensate for lost drivers; others will raise prices to cover compliance overhead and recruitment
• Enforcement swings: Reduced grant funding may actually mean fewer roadside inspections in some windows, then targeted crackdowns as political pressure rises

None of this is "normal cycle" behavior—it's policy risk at the lane level.

RXO's Curve: A Flat Q4 Now, Setup for 2026 Later

RXO's latest Curve report paints a nuanced picture:

• Truckload volumes: still muted in Q4 2025, although October–November were better than last year
• Spot rates: "stuck"—not collapsing, not breaking out
• Carriers: experiencing heavy cost pressure with ongoing capacity bleed (especially small fleets)
• Macro backdrop: recent Fed rate cuts could firm up manufacturing and investment heading into 2026, which RXO sees as the window for a more meaningful recovery

For brokers, this implies:

• The demand side is better than the worst of the downturn, but not enough to give small carriers easy profits.
• The supply side is still shrinking (exits, repos, licensing issues)—which will matter a lot once demand does pick up.

Layer in H.R. 5688, the California/NY enforcement fight, and revocations of non-domiciled CDLs, and you're looking at a structurally tighter driver pool right as the macro environment could turn more supportive.

Think of 2025 as the period where you survive and consolidate relationships, not chase every dollar. Position yourself with the right carriers so you can expand when 2026 volumes and rates finally move.

Tender Rejections Jump: Christmas Comes Early

FreightWaves' recent Chart of the Week shows the national truckload tender rejection index already at last year's peak, with almost no post-Thanksgiving lull.

That matters because:

• Tender rejections measure how often carriers turn down contract freight—usually because they see better-paying freight elsewhere, or they don't have the capacity.
• Higher rejection rates are a classic leading indicator that capacity is tightening relative to demand.

Context matters:

• We're not yet at 2021-style chaos, but for certain regional and seasonal lanes (e.g., holiday retail, reefer, port-related freight) conditions are tighter than they've been since the current downturn started.
• Combine that with drivers leaving the system via revocations and compliance changes, and some lanes will feel "hot" even while national averages still look bland.

Tariffs: The Slow-Burn Wildcard Into 2026

Tariffs are still casting a long shadow over freight markets, even as other topics grab the headlines.

The effects show up as:

• Soft imports overall, but with big swings port to port depending on tariff exposure
• Equipment cost inflation (trucks, trailers, parts) that hits small carriers hardest
• Sourcing shifts—more nearshoring to Mexico and some reshoring into U.S. manufacturing nodes

For brokers, tariffs rarely show up as a neat, clean story. Instead, they look like:

• A port that was your top volume hub suddenly going quiet
• A customer front-loading volume ahead of a tariff deadline, then disappearing for a quarter
• An odd rise in Mexico–U.S. or inland port lanes that isn't explained by typical seasonality

In a year where driver supply may tighten for regulatory reasons, these tariff-driven swings can be the difference between a manageable market and a capacity crunch in certain corridors.

How Modern Brokerages Handle This

Modern small and midsize brokerages aren't treating this as six separate news stories. They're building a simple, repeatable structure around risk:

1. Tag Risk at the Lane and Carrier Level

In a modern, broker-focused TMS, teams are tagging lanes by risk type:

• Non-domiciled CDL exposure (CA, NY, border, ports)
• Tariff-sensitive shippers or commodities
• High seasonal rejection risk

And tagging carriers for:

• CA/NY operating concentration
• Whether they've documented their CDL/ELP compliance process
• How they've performed on tender acceptance and on-time rate during past tight markets

This makes it easy for ops and sales to pull a list of "vulnerable lanes" in 30 seconds, rather than relying on tribal knowledge.

2. Build "Plan B" Capacity Before You Need It

Instead of waiting for a revocation wave or tariff shock to hit, modern brokerages are:

• Pre-building backup carrier lists for high-risk lanes, with quick access to safety and compliance notes
• Giving sales teams talk tracks and visuals that explain why certain lanes require backup carriers or higher rates in 2026
• Using the TMS to set alerts when a key lane's tender acceptance drops below a threshold or when loads repeatedly fall to spot

3. Make Compliance and Documentation Boring (In a Good Way)

Political fights aside, brokers are exposed if they keep tendering freight to carriers whose driver rosters haven't been cleaned up.

In practice, that looks like:

• Keeping carrier records and documents in one place (inside the TMS, not random email threads)
• Logging when carriers last attested to their CDL and English-proficiency compliance procedures
• Having a simple way to mark carriers as "under review" if they report significant driver turnover due to licensing changes

Tools like ARK TMS don't "solve" H.R. 5688 or tariffs, but they lower the friction for doing the boring blocking and tackling: consistent carrier notes and tags, quick lane-level reporting, and fast collaboration between ops, sales, and leadership when something breaks.

4. Scenario-Plan Like a Portfolio Manager

Modern brokerages are increasingly running simple "what if" exercises:

• What if we lose 10–15% of our California drayage capacity in Q1?
• What if tender rejections in our top 10 lanes double next peak season?
• What if a key tariff is expanded and a major import customer shifts routings overnight?

Even at a 5–20 person brokerage, you can do this with:

• Exports from your TMS (lane volume, carrier mix, margin by lane)
• A couple of simple capacity and rate assumptions
• A shortlist of actions you'd take under each scenario (add carriers, renegotiate contracts, shift focus to other verticals, etc.)

The point isn't to predict 2026 perfectly—it's to remove the surprise factor when policy and market changes land.

What To Do This Month

Small brokerages should take four concrete actions this month: map CDL and lane-level exposure, tighten California/New York carrier vetting, prepare for Q4 tender rejections, and build tariff contingency playbooks. Here's the breakdown by risk type.

For H.R. 5688 and CDL Risk

• Map exposure: Tag lanes in your TMS where >20–30% of capacity comes from fleets likely to employ non-domiciled drivers (port drayage, L.A.–Phoenix, SoCal produce, border crossings, NYC metro).
• Ask sharper questions: Without getting into immigration status, ask carriers how they are handling non-domiciled CDL audits, SAVE checks, and license expirations—and if they can prove it.
• Build "clean" backups: For high-risk lanes, build a second tier of carriers that already have documented compliance processes and a lower share of at-risk licenses.

For CA/NY-Heavy Networks

• Tighten carrier vetting: Add explicit questions about non-domiciled CDL audits, English-proficiency policies, and driver roster reviews to your onboarding and annual checkups.
• Monitor license events: Ask carriers whether they are tracking license revocation notices from states like California; keep an eye out for sudden driver turnover on frequent lanes.
• Communicate risk to shippers: Without politics, explain that compliance-driven capacity volatility is likely in 2026 and that they should expect occasional reroutes, mode shifts, or higher rates to stay compliant.

For Q4 Rejections

• Revisit routing guides with shippers, lane by lane, and highlight where their primary carriers are already struggling to accept tenders.
• Proactively propose backup carriers or slight contract rate increases in historically volatile lanes to prevent holiday service failures.
• Use your TMS or BI tools to flag lanes where spot dependency is creeping up—those are the ones most likely to blow up if conditions tighten further in early 2026.

For Tariff Exposure

• Help shippers analyze alternative routings (e.g., different ports, inland ramps, or cross-border gateways) and build playbooks in advance.
• Position yourself as the partner who can quickly rebalance carriers between U.S. domestic, Mexico cross-border, and port drayage as sourcing patterns shift.
• Keep an updated view of tariff-sensitive verticals (electronics, furniture, appliances, some industrials) and track how their volumes behave around policy dates.

What This Means Going Forward

The regulatory environment around CDLs, immigration, and state-federal enforcement is unlikely to stabilize anytime soon. Whether H.R. 5688 passes, gets modified, or stalls, the underlying tensions—between federal standards, state implementation, workforce demographics, and shipper expectations—will keep producing volatility.

For small and midsize brokerages, the practical response is the same regardless of the political outcome:

• Treat lane-level compliance and capacity risk as a first-class operational concern
• Build systems that document your vetting and decision-making processes
• Communicate proactively with shippers about what you're doing differently
• Position for a tighter 2026 by consolidating the right carrier relationships now

The brokerages that thrive through this transition will be the ones that turned "we try to be careful" into "here's our documented, repeatable process."

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ARK TMS is a modern transportation management system designed for small freight brokerages (1-25 users) who need fast setup, compliance visibility, and lean operations without enterprise complexity.