Quick Answer: Cabotage is the illegal practice of foreign drivers hauling freight between two points inside the United States, instead of returning to their home country after delivering an international load. Since November 2025, the U.S. Department of Transportation and U.S. Customs and Border Protection have merged their enforcement systems, and roughly 3,200 Mexican B-1 visa holders have lost their authorization to enter the U.S. for cabotage violations. The crackdown is tightening capacity along the border, reducing the rate undercutting that hurt US small carriers, and is widely seen by industry analysts as one of the factors that could help rebalance freight rates in 2026.
In this guide you’ll learn:
- What cabotage actually means, and why it is illegal in the U.S.
- The labor cost math that made cabotage a quiet business model
- How the DOT and CBP partnership changed enforcement in November 2025
- The English Language Proficiency rule that took effect alongside it
- What the crackdown means for US small carriers and owner-operators
- What to do now to take advantage of the shift
What Is Cabotage?
Cabotage is the transportation of freight between two points inside one country by a carrier or driver from another country. In the U.S. trucking context, it means a Canadian or Mexican driver picking up a domestic load and delivering it inside the United States, after their original international load was already delivered.
Cross-border trucking itself is legal and economically important. A Mexican or Canadian carrier may deliver an international load into the U.S. After that delivery, the carrier has two legal options: return to their home country empty, or take a single load from the U.S. directly back across the border. What is not legal is staying inside the U.S. and running multiple domestic loads before returning home. That is cabotage.
The rule exists to protect domestic carriers from foreign competition that does not bear the same regulatory, tax, and labor costs as a U.S. operator.
Why Cabotage Has Hurt US Small Carriers
The economic damage from illegal cabotage is not theoretical. It comes from a labor cost gap that turned into a quiet business model.
The American Transportation Research Institute reported that U.S. domestic carriers paid drivers about 78 cents per mile on average in 2024. A driver working on a Mexican B-1 visa can be paid significantly less, with one FreightWaves analysis estimating an effective labor arbitrage of about 43 cents per mile available to any carrier willing to break the law.
The math at scale is what made cabotage attractive to bad actors. A 10-truck operation running about 120,000 miles per truck per year captures roughly $5.1 million in labor savings annually by dispatching B-1 drivers on domestic loads instead of paying U.S. wages. That is not a small margin advantage. It is a structural undercut.
When a shipper or broker sees a rate that comes in 15 to 20 percent below the domestic market, that gap often traces back to this exact arithmetic. For US small carriers and owner-operators, it has meant losing freight on price to operators who were not playing by the same rules.
The November 2025 Turning Point
Enforcement changed visibly in late 2025, and has accelerated through the first half of 2026.
The first clear public signal came in November 2025, when U.S. Border Patrol agents at the Interstate 19 immigration checkpoint near Nogales, Arizona, stopped two Mexican tractor-trailers, determined the drivers had violated cabotage laws, and informed them their border crossing cards would be processed for revocation. The trucks were towed. The drivers were returned to Mexico. CBP issued a public release framing the action as protecting U.S. trucking jobs.
In the months that followed, more cases surfaced. In December 2025, the Department of Homeland Security raided an Arizona trucking company suspected of participating in cabotage. In March 2026, a Mexican driver was arrested at the Highway 78 checkpoint near Palo Verde, California, after Border Patrol determined he had transported a load of produce from Yuma, Arizona to Grandview, Washington. His B-1/B-2 visa was revoked. He was processed for deportation. The truck was seized.
In February 2026, U.S. Senator Todd Young introduced the SAFER in Transport Act, which called for a formal memorandum of understanding between FMCSA and CBP to coordinate cabotage enforcement between the two agencies that had historically operated in separate silos.
How the DOT and CBP Partnership Works
The pivotal change is operational, not legal. The cabotage rules themselves did not change. The enforcement mechanism did.
According to Pedro Lozano Martínez, president of the Nuevo Laredo Freight Carriers Association and a delegate of Mexico’s National Chamber of Freight Transportation (CANACAR), the systems used by DOT and CBP have been merged. Drivers who receive a warning for possible cabotage during a DOT inspection now face automatic, electronic visa revocation by CBP. There is no separate investigation. The revocation is processed in the background.
A DOT spokesperson confirmed the partnership to Overdrive in a statement that did not dispute the broader picture: “The era of looking the other way is over. Under Secretary Duffy, USDOT is leveraging data sharing with U.S. Customs and Border Protection to ensure that if a driver is caught breaking our cabotage laws, there are immediate and real consequences.”
The practical effect: a driver flagged for cabotage may not learn their visa has been revoked until they try to cross the border on the way home. According to Lozano, the operator often does not realize the revocation has happened unless they check their email.
CANACAR data indicates approximately 3,200 drivers across the border region have had visas revoked. DOT did not confirm the specific number, but confirmed both the partnership and that cabotage reports now affect visa status.
The English Language Proficiency Rule Change
A second enforcement shift is happening in parallel, and it matters for the same reason.
Under FMCSA’s updated border-zone guidance, English Language Proficiency violations can now result in an out-of-service order at the border, not just a violation citation. The change followed a Trump executive order on English proficiency enforcement, and ELP violations climbed sharply in the second half of 2025.
FTR Transportation Intelligence has estimated that, annualized, the ELP enforcement alone could take roughly 25,000 drivers off the road in a year. The rule applies to all drivers, not just B-1 holders, but B-1 cross-border drivers tend to be disproportionately affected because the inspection happens at the border.
Together, the cabotage and ELP enforcement actions remove illegal capacity and reinforce existing federal standards on the legal capacity that remains.
What This Means for US Small Carriers
The combined effect of the cabotage and ELP enforcement is straightforward: less unauthorized capacity in the market, and less rate undercutting from operators who could not legally be there in the first place.
Industry analysts are direct about the impact. Avery Vise, vice president of trucking at FTR, told FleetOwner that capacity has tightened even further in 2026, leaving the industry in a stronger position for recovery once demand returns. Schneider National and J.B. Hunt executives have publicly stated that stricter cabotage enforcement can be one of the last steps the trucking market needs to find a supply-demand equilibrium. J.B. Hunt’s Brad Hobbs called it “a really big play on where cheap rates are coming from.”
The regional impact is uneven. The Southwest and Southeast feel the change first, simply because that is where cross-border traffic concentrates. Carriers running lanes through Laredo, El Paso, Nogales, Otay Mesa, and South Texas have seen capacity tighten more visibly than carriers operating in the Midwest or Northeast.
For US small carriers and owner-operators, three things become more likely as enforcement continues:
- Less rate undercutting on spot freight. The 15 to 20 percent below-market rates that often originated from B-1 cabotage arithmetic become harder to find.
- Tighter capacity in border-adjacent regions. Carriers willing to run lanes through Laredo and Otay Mesa stand to benefit most in the near term.
- A more competitive equilibrium overall. Honest operators get to compete on service and reliability, not against an artificial 40 cent per mile labor advantage.
Some Mexican-side business groups have warned that the enforcement could create border delays and increase cross-border trucking costs, which is true. The legal cross-border carriers who play by the rules absorb some of the friction. The point of the enforcement is not to reduce legal cross-border trade. It is to remove the illegal portion.
What US Small Carriers Should Do Now
You cannot control federal enforcement timelines, but you can position your operation to benefit from them. A practical checklist:
- Bid more aggressively in border-adjacent lanes. If you operate in or through the Southwest, the rate environment is shifting in your favor. Watch DAT and Truckstop benchmarks in those regions for weekly movement.
- Tighten your own compliance. With enforcement intensifying broadly, this is a bad time to have an ELD vendor at risk of revocation, a sloppy DataQs record, or an outdated principal place of business. We covered the broader compliance reset in our 2026 IFTA and ELD compliance guide.
- Track per-lane and per-truck profitability in real time. As rates move, the gap between a winning lane and a losing one widens quickly. Carriers that can see margin live, not at month-end, capture the rebalancing first. That is exactly what a connected TMS is for.
- Build broker relationships now. When capacity tightens, brokers reach for the carriers they already trust. A small fleet with steady, documented performance is in a stronger negotiating position in this environment than it was a year ago.
- Watch the broader policy stack. Cabotage and ELP enforcement are the most visible federal actions, but the BUILD America 250 Act also targets fraud, registration, and ELD certification. The direction is the same: federal policy is tightening the field around the legitimate operator.
Frequently Asked Questions
What is cabotage in trucking? Cabotage is the practice of a foreign carrier hauling freight between two points inside another country. In the U.S., it specifically means a Canadian or Mexican driver picking up a domestic U.S. load and delivering it inside the U.S. after their original international load. Cabotage is illegal.
Why is cabotage illegal in the U.S.? U.S. cabotage rules exist to protect domestic carriers from foreign competition that does not bear the same regulatory, tax, and labor costs. They also prevent foreign drivers on temporary business visas, like the B-1, from effectively working as domestic U.S. employees.
What is a B-1 visa, and how is it used in trucking? The B-1 visa allows foreign nationals to enter the U.S. temporarily for business. In trucking, it lets a Mexican driver deliver an international load into the U.S. and either return home empty or take a single direct load back. It does not permit the driver to run multiple domestic loads inside the U.S.
How many drivers have lost their U.S. visas in the cabotage crackdown? According to CANACAR data shared with Mexican media and reported by FreightWaves and Overdrive, approximately 3,200 Mexican drivers across the border region have had their U.S. visas revoked in recent months. The U.S. Department of Transportation has confirmed the broader partnership and enforcement actions without confirming the exact number.
When did the cabotage crackdown actually start? The visible public enforcement began in November 2025, with two Mexican tractor-trailer cases at the Interstate 19 checkpoint near Nogales, Arizona. Enforcement has expanded through the first half of 2026.
What is the DOT and CBP partnership? The U.S. Department of Transportation and U.S. Customs and Border Protection have merged their systems so that drivers flagged for cabotage during DOT inspections are automatically processed for visa revocation by CBP. The result is an electronic, real-time consequence for cabotage violations that used to produce only paper citations.
How does cabotage affect U.S. trucking rates? Illegal cabotage adds capacity to the U.S. market that should not be there and undercuts rates because foreign drivers on B-1 visas can be paid significantly less than U.S. wage rates. Removing that capacity reduces undercutting and tightens supply, which generally pushes rates upward, especially in border-adjacent regions.
What is English Language Proficiency enforcement? FMCSA’s updated border-zone guidance allows out-of-service orders when a driver cannot demonstrate adequate English proficiency. The change followed a 2025 executive order on English proficiency enforcement and affects all drivers, not only foreign B-1 holders. FTR estimates the ELP crackdown alone could remove around 25,000 drivers from U.S. roads annually if current trends continue.
Which regions are most affected by the cabotage crackdown? The Southwest and Southeast feel the change first, because cross-border traffic concentrates there. Lanes through Laredo, El Paso, Nogales, Otay Mesa, and South Texas have seen the most visible capacity tightening so far.
Does the crackdown affect legal cross-border trucking? Legal cross-border trucking continues. A Canadian or Mexican carrier delivering an international load into the U.S. and returning home, or taking a single direct return load, is operating legally. The crackdown targets carriers and drivers who go beyond that and run domestic U.S. loads in violation of cabotage rules.
Will the cabotage crackdown actually raise rates for U.S. small carriers? Industry leaders including executives at Schneider National and J.B. Hunt have publicly said stricter cabotage and B-1 enforcement is one of the factors that could help rebalance supply and demand. FTR’s Avery Vise has said capacity has tightened enough that the industry is in a stronger position for recovery in 2026. The clearest effects so far are concentrated in border-adjacent regions.
What should US small carriers do to take advantage of the shift? Three things. Bid more confidently in border-adjacent lanes where capacity is tightening. Tighten your own compliance, because enforcement is broadly intensifying. And track per-lane and per-truck profitability in real time so you can spot which lanes are moving in your favor before the quarter ends.
The Bottom Line
For most of the past two years, US small carriers have been competing against operators who were not playing by the same rules. The November 2025 partnership between DOT and CBP, the parallel English Language Proficiency enforcement, and the broader federal direction on registration and fraud have collectively started removing that gap.
The crackdown does not solve every problem in the freight market. Demand still has to recover. Diesel still moves. Insurance still rises. But for the first time in a long time, an honest US small carrier is no longer competing against a structural 43 cent per mile labor advantage that was being taken illegally.
That is worth understanding, and it is worth being positioned for.
Start your free trial of TenTrucks and run your operation from one platform that gives you live per-lane and per-truck margin, so you can see exactly where the rebalancing is helping your business.
Sources and References
- Overdrive, “Cabotage: Border Patrol revokes visas from Mexican drivers, FMCSA updates ELP rules at border,” June 2026
- FreightWaves, “Borderlands Mexico: Thousands of Mexican truckers lose US visas over cabotage violations,” June 2026
- FreightWaves, “What 21,000 foreign trucks on American highways looks like,” May 2026
- Transport Topics, “Mexican Truckers Lose Visas in Cabotage Crackdown,” May 2026
- FleetOwner, “Cabotage crackdown: How stricter B-1 visa enforcement could rebalance trucking”
- FleetOwner, “Trucking capacity reached a bottom; 2026 just needs better freight rates”
- CDL Life, “Mexican truck driver’s B1/B2 visa revoked for illegal cabotage,” April 2026
- U.S. Customs and Border Protection, “Border Patrol agents protect U.S. jobs by enforcing cabotage laws,” November 2025
- American Transportation Research Institute, driver pay data, 2024
- FTR Transportation Intelligence, English proficiency enforcement projections, 2026
For official guidance, consult fmcsa.dot.gov and cbp.gov. Cabotage rules are federal law and enforcement is evolving. This article is informational and is not legal advice.
About TenTrucks
TenTrucks is an AI-powered fleet operations platform for owner-operators and U.S. carriers running 1 to 50 trucks. It combines TMS and dispatch, ELD and compliance, automated IFTA, settlements, invoicing, and a mobile driver app in one system, so carriers can see live per-lane and per-truck profitability as freight market conditions change.
Disclaimer: This article is for informational purposes only and does not constitute legal or immigration advice. Cabotage rules and enforcement practices are evolving. Consult qualified counsel and official government sources for compliance decisions.
