Shipping & Freight News

U.S. Transportation Secretary Sean Duffy issued a sharp warning to North Carolina this week after a federal audit found that more than half of the commercial driver’s licenses (CDLs) the state issued to foreign truck drivers were granted unlawfully. The findings prompted the Department of Transportation to demand immediate corrective action, citing roadway safety and federal compliance concerns.

“I’m calling on state leadership to immediately remove these dangerous drivers from our roads and clean up their system,” Duffy said in a press release announcing the preliminary audit results. He warned that failure to act could trigger enforcement measures by the Federal Motor Carrier Safety Administration (FMCSA), including the potential loss of roughly $50 million in federal transportation funding for fiscal year 2027.

In a letter sent Thursday to North Carolina Governor Josh Stein and Paul Tine, head of the state’s Division of Motor Vehicles, Duffy outlined additional consequences if the state does not comply.

“In addition, if FMCSA issues a final determination of substantial noncompliance, the agency may decertify North Carolina’s CDL program,” Duffy wrote. The state has 30 days to respond with a plan detailing how it will correct the deficiencies identified in the audit.

The administration’s warning to North Carolina comes amid a broader federal crackdown and follows a high-profile confrontation with California that escalated this week. On Wednesday, Duffy announced that FMCSA will withhold approximately $160 million in federal safety program funding from California after the state failed to meet a January 5 deadline to revoke more than 17,000 CDLs that the department says were unlawfully issued to foreign drivers.

California’s Department of Motor Vehicles had announced in late December that it would delay the cancellations until March 6, but FMCSA rejected the extension.

“Our demands were simple: follow the rules, revoke the unlawfully-issued licenses to dangerous foreign drivers, and fix the system so this never happens again,” Duffy said. “Gavin Newsom has failed to do so—putting the needs of illegal immigrants over the safety of the American people.” He added, “While Gavin may not care about protecting you and your family on our roads, the Trump Administration does. We’re pulling this funding to ensure federal tax dollars don’t fund this charade.”

The $160 million penalty represents only the first year of potential sanctions. Under federal law, if California continues to defy FMCSA’s final determination, the amount of funding withheld could double in the second year, further escalating the dispute between state and federal officials.

Industry analysts say the enforcement actions could have ripple effects across freight markets, particularly on the West Coast, where capacity is already under pressure from regulatory changes and a prolonged freight downturn. Truck transportation employment figures underscore that strain. According to the Bureau of Labor Statistics, truck transportation jobs totaled 1,513,300 in December, the lowest level in 4.5 years and the smallest workforce since July 2021, when employment stood at 1,514,600.

Triple T Transport is monitoring the situation and will continue to share updates as they develop.