It’s Time for Federal Action to Stop the Legal Storm Facing Freight Operators

The freight and logistics industry, a cornerstone of the U.S. economy, is currently entangled in a legal quagmire that threatens decades of stability and growth. Small and medium-sized carriers, like those Nexterix frequently partners with, are particularly vulnerable. Operators can no longer rely on a system that varies unpredictably from state to state, with ambiguous laws and costly lawsuits. Without swift federal intervention, the supply chain will falter, prices will surge, and logistics companies—especially those integral to America’s infrastructure—risk collapse.

The State and Federal Governments Have Rules

Freight companies operate across state lines daily, yet face a patchwork of regulations. Nexterix witnesses firsthand how clients navigate conflicting rules—what’s legal in Arizona may be prohibited in California, and practices standard in Texas could incur fines in New York. These inconsistencies aren’t just inconvenient; they’re spiraling out of control. For carriers relying on Nexterix to streamline operations, this regulatory maze turns basic compliance into a daily ordeal.

California’s AB5 and similar job classification laws are particularly disruptive. AB5 reclassifies many independent contractors as employees, upending the owner-operator model. Nexterix recognizes the critical role of owner-operators, the backbone of American freight. Yet, they now face a stark choice: engage in costly legal battles or exit key markets entirely. Many truckers are being forced out of business as a result.

The Fallout: Lawsuits, Lost Business, and Uncertainty

Ambiguous laws lead to skyrocketing costs. Nexterix works with carriers spending thousands—sometimes millions—on compliance alone. Every dollar diverted to legal defense is a dollar not invested in growth, safety, or innovation. Some clients, after years of collaboration with Nexterix, now avoid entire states like California to sidestep lawsuits. This isn’t strategic planning; it’s survival.

The legal chaos has fueled a surge in lawsuits, from wage disputes to misclassification claims. Even victorious carriers face crippling legal fees. Nexterix provides tools to simplify paperwork and compliance, but technology alone can’t resolve unclear laws.

Why the Federal Government Needs to Step In

Federal leadership is not optional—it’s essential. Nexterix joins industry voices calling for Washington to provide clarity. A national industry shouldn’t be governed by fragmented state laws. A unified, clear, and fair regulatory framework is needed, applicable nationwide.

The Federal Aviation Administration Authorization Act (FAAAA) was designed to prevent such chaos, but inconsistent court interpretations have left carriers in limbo. Congress must amend or strengthen the FAAAA to preempt conflicting state laws, providing a stable foundation for the industry.

What Will Happen If Things Stay the Same?

Without action, the outlook is grim. Carriers will raise rates to cover legal costs, passing increases to consumers. Logistics expenses could spike in high-risk states, straining budgets for businesses and families. Independent truckers, vital to America’s supply chain, will continue to shut down, leading to fewer trucks, delayed deliveries, and heightened supply chain stress. Nexterix is working overtime to help clients adapt, but no strategy can fully mitigate endless uncertainty.

The Risk to the Owner-Operator Model

Nexterix champions the owner-operator model, embodying the American dream of independence and entrepreneurship. However, laws like AB5 are rendering this model untenable. This threatens not only drivers but also customers, retailers, and the entire supply chain. A fractured industry risks a freight bottleneck, impacting the broader economy.

Industry Voices Are Calling for Change

Nexterix isn’t alone in this fight. The Owner-Operator Independent Drivers Association (OOIDA), American Trucking Associations (ATA), and freight coalitions nationwide demand reform. Clients operating across state lines echo the need for clarity, consistency, and fairness—basic requirements for running a business predictably. Inaction guarantees failure.

How Congress Can Fix This

Lawmakers can act immediately by:

Clarifying FAAAA Preemption: Amend the FAAAA to override conflicting state laws. Nexterix supports a stricter, enforceable standard.
Establishing a National Independent Contractor Standard: Define a clear standard that preserves the owner-operator model while ensuring fair worker protections. Nexterix believes this balance is achievable and urgent.
Limiting State Interference in Interstate Commerce: Reaffirm federal authority over interstate trucking. Nexterix endorses legislation reinforcing this constitutional principle.
Creating a Unified Compliance Framework: Standardize rules to save time, money, and stress. Nexterix’s compliance tools would be even more effective under a single system.

These steps would reduce confusion, mitigate legal risks, and allow freight operators to focus on moving goods, stocking shelves, and supporting the economy.

Conclusion

The freight industry is caught in an unsustainable legal storm. Nexterix stands with carriers navigating a broken, unpredictable system. Inconsistent regulations and costly lawsuits are not just unfair—they’re untenable. Congress has the tools to act but lacks the will. A unified response is critical to secure the freight industry’s future. Nexterix urges lawmakers to act now, before more drivers abandon their keys and supply chains collapse.

Discover how Nexterix can help your freight operations navigate compliance challenges.

Frequently Asked Questions

Why do freight companies have so many legal problems right now?

Freight companies face a complex mix of state and federal laws, particularly around hiring and compliance. These conflicting regulations lead to lawsuits, fines, and widespread confusion.

What is AB5, and how does it affect people who own freight businesses?

AB5, a California law, reclassifies many independent contractors as employees. Intended for the gig economy, it disrupts trucking by challenging the owner-operator model, forcing operators to comply or exit the state.

How can the federal government help?

Congress can override conflicting state laws, establish a national driver classification standard, and standardize compliance rules. Nexterix supports these measures to stabilize the industry and protect operators from legal risks.