Cabotage
The restriction on foreign carriers from transporting goods or passengers between two points within a country, protecting domestic transportation markets from foreign competition.
Cabotage refers to the transport of goods or passengers between two points within a country by a carrier from another country. In the context of U.S. trucking, cabotage laws restrict foreign-registered motor carriers (typically from Canada or Mexico) from picking up and delivering freight between two domestic U.S. locations. These restrictions are designed to protect the domestic trucking industry from foreign competition.
Under current U.S. cabotage rules, a Canadian or Mexican carrier may deliver freight from their home country to a point in the United States, or pick up freight in the United States for delivery to their home country, but they generally cannot transport freight between two U.S. points. For example, a Canadian carrier can deliver a load from Toronto to Chicago, but cannot then pick up a load in Chicago and deliver it to Dallas.
Cabotage regulations are an important consideration for cross-border carriers and shippers. Violations of cabotage rules can result in fines, seizure of cargo, and revocation of cross-border operating privileges. Understanding these restrictions is essential for carriers involved in international freight transportation between the U.S., Canada, and Mexico, particularly under trade agreements such as the USMCA (United States-Mexico-Canada Agreement).
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Frequently Asked Questions
Can a Canadian truck pick up and deliver freight between two U.S. cities?
Generally no. Under U.S. cabotage laws, foreign carriers are restricted from transporting goods between two domestic points. A Canadian carrier can deliver loads from Canada to the U.S. or pick up loads for delivery to Canada, but they typically cannot haul freight solely between two U.S. locations.
What are the penalties for cabotage violations?
Penalties for cabotage violations can include substantial fines, seizure of the cargo, and potential revocation of cross-border operating privileges. Both the carrier and the shipper who arranged the illegal movement may face enforcement actions.
Does cabotage apply to U.S. carriers in Canada?
Yes. Canada has its own cabotage restrictions that prevent U.S. carriers from transporting goods between two Canadian points. The rules are reciprocal, and each country protects its domestic transportation market from foreign carriers.
Related Terms
Operating Authority
The legal permission granted by the FMCSA that allows a carrier, broker, or freight forwarder to conduct for-hire transportation operations in interstate commerce.
FMCSA
Federal Motor Carrier Safety Administration
The federal agency within the U.S. Department of Transportation responsible for regulating the trucking and bus industries, with a focus on reducing crashes, injuries, and fatalities.
USDOT Number
United States Department of Transportation Number
A unique identifier assigned by the FMCSA to commercial motor carriers operating in interstate commerce, used to track safety information and compliance.
MC Number
Motor Carrier Number
An operating authority number issued by the FMCSA that grants carriers the legal right to transport passengers or regulated commodities for compensation across state lines.