For more than three years, Steve Troyer says his family-owned trucking company has been forced to compete against carriers using low-cost, non-domiciled CDL drivers — allowing freight to move well below operating costs.
“The last three years have been brutal”,” Troyer said in an interview with FreightWaves, describing a freight market where many loads have consistently moved below operating costs since mid-2022.
Troyer, president of California Midwest Xpress, said downturns are nothing new in trucking, but the current cycle is unprecedented in both its length and severity. For much of the past three and a half years, he said, brokered freight moving more than 500 miles has routinely paid 25 to 75 cents per mile below his company’s operating costs.
“That just can’t go on forever,” Troyer said. “You eventually run out of working capital, you run out of equity in your equipment, and you’re forced to consider taking on debt to finance operations – a gut wrenching decision after years of losses & no clear turnaround in sight.”
Troyer’s account adds to a growing body of evidence across the trucking industry suggesting the current downturn is not simply cyclical, but a structural shift driven by labor arbitrage, fraudulent CDLs and uneven enforcement.
His experience echoes warnings previously raised by industry executives and former carriers who say non-domiciled CDL drivers and weak oversight have distorted freight pricing, rewarded noncompliance and placed compliant fleets at a severe disadvantage — with implications extending beyond rates to safety and long-term capacity.
Related: English-language crackdown exposes how cheap labor and CDL fraud are remaking trucking
OTR Solutions COO Grace Maher and former carrier owner Cliff Bates previously told FreightWaves that labor arbitrage, CDL fraud and lax enforcement are reshaping trucking and squeezing compliant fleets out of the market.
Maher said the industry is being undercut by transient, non-domiciled drivers who “run hard, undercut rates, don’t speak English very well, and then go back home before coming back and doing it all over again,” adding that American truckers “cannot make a living if those carriers continue to take the freight because they just want to get loaded.”
Bates similarly described a “new ecosystem” in trucking powered by fraudulent CDLs and ultra-cheap labor, warning that foreign drivers “make a fraction of what American drivers make, and undercut every rate.”
Troyer said he is now living the economic consequences of that shift firsthand — hauling freight below cost for years while compliant carriers steadily run out of capital.
A different cost structure driven by labor
Like Maher and Bates, Troyer traces much of that shift to changes surrounding non-domiciled commercial driver’s licenses, which he said opened the door to tens of thousands of new drivers willing — or forced — to work for far less than U.S. market wages.
“These carriers are saving enormous amounts on driver labor and skirting rules and regulations,” Troyer said. “If I could pay my drivers and my staff half of what I pay them and gain a 25- to 50-cent-per-mile cost advantage, I could run this freight profitably. But we can’t.”
Fuel, insurance, tires and maintenance costs are largely the same for all carriers, Troyer said, leaving labor and compliance as the primary variables. Operators that cut corners on those fronts can underbid compliant fleets and still survive.
“You just can’t compete against somebody that’s skirting regulations or exploiting imported labor,” Troyer said. “You rely on the government to create a level playing field — and that’s not happening.”
Troyer said fraudulent or improperly issued CDLs are a key part of the problem, fueling what he described as unsafe and exploitative operating practices.
He recounted hearing reports of trucks rotating multiple drivers — some without CDLs — or operating under conditions he likened to “rolling sweatshops,” creating both safety risks and unfair competition.
“By exploiting people, they’re creating a competitive advantage,” Troyer said. “And the compliant operators are the ones getting punished.”
He also pointed to federal safety data showing a sharp rise in truck-related fatalities since 2016 — a period when electronic logging devices were expected to improve safety — as a troubling signal that deeper issues may be at play.
A call for a level playing field
Troyer said the solution is not more rules, but consistent enforcement of the laws already on the books.
“Whether it’s safety, labor or licensing — enforce it aggressively,” he said. “Make us all obey the same laws. Let everybody play on a level playing field.”
Absent that, he warned, the industry risks losing compliant carriers that have anchored U.S. freight networks for decades.
“There are a lot of great trucking companies out there doing it right,” Troyer said. “But if you chase them out of business, you’re going to be left with a big problem.”
