Transport Topics / Cabotage Rules

Cabotage Rules

Cabotage is the transportation of goods or passengers between two places in the same country by a transport operator from another country. It originally applied to shipping along coastal routes, port to port, but now applies to aviation, railways, and road transport as well.

​Cabotage rules are not USDOT rules. They are customs and immigration rules. Violation of these rules go beyond USDOT civil violations and enter into criminal violations. Anyone violating US federal immigration laws faces jail time, deportation, and denial of entry into the U.S. for any future visit, personal, commercial, or otherwise.

There are two different regulations governing this. The customs side restricts the movement of the vehicle, and the immigration side impacts the driver's legal status to work in the U.S. The problem here is that people only read the customs side (less restrictive), stop, and think they are OK. The immigration rules are far stricter, and unless the driver is a U.S. citizen or has a green card to work in the U.S., they are very restrictive. The immigration laws forbid any Canadian from performing a job a U.S. citizen can perform.

A simple rule to follow is as follows:

All freight in a Canadian Truck driven by a Canadian Driver must cross a border. The only exception is a "relay driver", which is a team employed by the same company. Relay drivers may drive entirely domestic segments of an international delivery provided these two conditions are meet.

1) The driver must be employed by the same company as the delivery.
2) The domestic portion of the trip is a necessary incident to the international nature of the trip.

Relaying is permitted in order for drivers to comply with Federal regulations regarding the number of consecutive hours an individual is permitted to drive. They need not enter with the vehicle, but must enter within a reasonable period. Movements not permitted for the driver are as follows:

1) Drivers may not pick up a shipment at one U.S. location and deliver that shipment to another location.
2) Drivers may not reposition an empty trailer between two points in the United States when the driver did not either enter with or depart with that trailer.
3) Drivers may not “top up” an international shipment with U.S. domestic shipments.
4) Drivers may not solicit shipments for domestic deliveries while in the United States.

USE OF CANADA BASED VEHICLES FOR DOMESTIC TRANSPORTATION

Provided the driver is legally permitted to work in the U.S., a domestic movement incidental to the immediate prior or subsequent engagement of a vehicle in international transportation is allowed. Incidental is defined as in the general direction of an export move or as part of the return movement to their base country. It includes a movement en route to the pick-up of an export move. For example, a Toronto, ON-based carrier transports merchandise originating in Toronto and terminating in Miami, FL. The vehicle can then be used to pick up merchandise in Miami for delivery to St Louis, MO (a domestic move) where an export move will be picked up for delivery to Canada. The movement of merchandise from Miami to St Louis is considered incidental to the immediate prior or subsequent engagement of such vehicle in international transportation. The Canadian-based vehicle can also transport a domestic move in the general direction of an export move and then immediately return empty to Canada. The purpose of this change in Cabotage regulations was to allow more efficient and economical utilization of vehicles both domestically and internationally.

FREIGHT PICKED UP IN THE U.S FOR DELIVERY TO A FOREIGN PORT SUCH AS MEXICO

There is no exception for picking up freight in the U.S. and dropping in a "Foreign Trade Zone". Freight that is picked up in the U.S. and dropped off in the U.S. can only be performed by a U.S. citizen. Whether the cargo is "destined" to eventually leave the U.S. is irrelevant. It is still being picked up in one U.S. location and being dropped off in another U.S. location. If the driver were to pick up the load in Michigan and actually cross it into Mexico that would be OK, but because they are dropping in the "Trade Zone" and are not employed by the same company as delivery it is not ok.

The rule is pretty simple and direct - all freight must cross a border that the driver is picking up and unloading. That same driver has to do the movement over the border unless it’s a team working for the same company. If a Canadian driver were picking up a load from Chicago to New York that was eventually destined to Montreal and to be taken by another Canadian driver, that trip would still be in violation even if the load was destined for Canada. Even if one package is picked up and dropped off in the U.S. it is a violation of the law.


I advise anyone if they are in doubt to err on the side of caution here because of the seriousness of the potential consequences. If you have to ask if it’s OK or Not, it’s probably Not OK.


Click Guidelines for Compliance.pdf to view a reference guide from customs on the Cabotage issue. There are phone numbers available in there to further assist with questions on these issues.