Career
The concepts of cabotage and cabotage transport are used interchangeably. In fact, the term cabotage is more general and covers two different types of transport. In common parlance, cabotage is simply called coastal shipping. In turn, the legal definition of cabotage transport was included directly in the regulation of the European Parliament and of the Council and reads as follows: domestic commercial transport performed temporarily in the host Member State.
What does cabotage transport consist of?
It only applies to domestic operations implying that most firms of foreign origin require the necessary licenses to do so. This is done to shield domestic industries from unfair competition and gaze at pertinent issues to do with national security.
Integral and domestic cabotage transport are mostly used in short-sea shipping and in road transportation of goods within the national borders. However, there are exceptions. The current legislation regarding cabotage operations in the European Union is that there is free access by the carriers of a particular member state to other member states with some restrictions in terms of their number and the period for their implementation. Also, there are some bilateral cross border rules that permit a few international commercial vehicles to undertake a restricted number of operations that involve domestic carriage in other nation’s territory under some circumstances.
Cabotage rights and regulations
While the definition is the same around the world, specific cabotage rules and cabotage laws can vary significantly between different countries. Nation states tend to have their own cabotage laws in place to regulate and/or restrict foreign vessels from carrying out domestic maritime transportation. For example, country X may not allow foreign ships (i.e. any vessels not from country X) to collect and move goods between two domestic ports (i.e. two ports within the borders of country X). As a result of putting these regulations in place, country X will be better able to support its domestic maritime industry by giving preference to those vessels which are locally registered and operated within country X.
Requirements of the carrier during cabotage carriage
Cabotage has been defined by the following regulations: The European Union (EU) has regulations regarding cabotage outlined by the European Commission and the European Parliament. In response to these concerns, the following rules have been established to safeguard the operation of domestic transport companies and constrain unfair competition. The carrier have to do an international transport delivery to the host country before doing any cabotage. This means that all imported goods whether in the process of manufacturing, are initially required to be delivered.
In terms of multiple cabotage operation, it has been seen that permitted in most countries, the carriers are allowed a limited number of cabotage operations shortly after the first delivery. Moreover, any operation involving cabotage must be done within a certain period. Vehicle restrictions operations can only predominantly be done with the same car that was used for the initial international carriage. This makes it difficult for carriers to bring empty vehicles in a particular country for the purpose of effecting cabotage.
So, how many cabotage operations could be done? The original permit may sometimes allow even only one cabotage operation even if the vehicle entered empty, although it is more often done with a shorter time limit.
Documents required during cabotage transport
The working documents to be prepared will vary depending on the legal requirements of the individual countries under consideration and the nature of the goods to be transported. However, based on the general requirements for international and domestic transport, some documents required include:
-
General transport documents, such as commercial invoice, packing list, bill of lading or CMR note, insurance documents.
-
Speaking about vehicle and driver documents, these are copy of registration, documentation for a vehicle being certified in the carrier’s home country, driver’s license and any permits they need when driving. The transportation may also include some cabotage-specific documents.
Advantages and disadvantages of cabotage carriage
Cabotage transportation services is still very popular among transport companies. However, legal regulations are increasingly limiting the possibilities that carriers have at their disposal. The cabotage transport system like any other business model has its own benefits and drawbacks.
Advantages of cabotage transport
One of the advantages is the minimization of service by foreign aircrafts or ships which are covered under cabotage regulations. It can assist in the establishment of sound domestic maritime or aviation cabotage industry since domestic services have to be done through the national carriers. It also leads to job creations and enhances the economic development of that one country.
Some cabotage operations may enhance the efficiency of operations, hence, their need to continue being permitted. For instance, in combined transport the international sea transport can be directly routed with domestic road legs if the vessel has space for a further load. This cuts down on the number of empty legs and may reduce the costs of transport in the long run.
Moreover, it is possible to drive more empty runs for the cabotage, which can lead to the reduction of the overall environmental impact on the transport sector.
Disadvantages of cabotage transport
On the other hand, lack of entry at the operational level means higher prices for consumers, since there are fewer service providers to choose from. This can be especially relevant if there are not enough flights offered directly by domestic carriers, and/or those direct flights are not efficient in terms of cost.
Limited growth for international companies is another issue. There could be limitations imposed for the operations of foreign transporters which affects the growth of international transport organizations as they are restricted to providing services within the same country.
Finally, cabotage regulations can make it less flexible to adapt to changing needs. For instance, if domestic vessels cannot be procured to meet increased transport requirements for carriage of goods, this leads to congestion and slowing down of trades.
When is it appropriate to opt for cabotage transportation? For whom will it be suitable?
Open supply chain is perfect for transporting goods from one point to another within a particular nation within the EU. This may entail the application of road transport in conjunction with a sea transport for the combined transport. Some EU member states might have bateral relations with other countries. These agreements could allow cabotage operations with regard to certain contingencies.
Thus, cabotage primarily favors and strengthens the local EU shipping industry players in the manner explained above.
Cabotage violations - What are the penalties for non-compliance?
Sanctions for noncompliance can be severe and include money penalties, which may differ depending on the particular country and the type of transport that violates the cabotage regulations, such as road transportation, marine transportation, etc.
EU member states and other nations with cabotage laws establish harsh penalties including hefty fines among other sanctions. They can be staking-specific or cumulative, depending on the gravity of the infraction committed. The authorities may opt to limit the extent to which a certain firm or Company is allowed to undertake cabotage operations for a specific duration. In some instances, the authorities have the discretion to impound the vehicle (e. g., truck) or vessel involved in the violation of the cabotage law until approved penalties are paid.
Looking for a company for cabotage transportation? Take advantage of AsstrA's offer
AsstrA offers comprehensive cabotage solutions to streamline your business operations. We handle all your road transport needs and can even arrange for combined transport (road and sea or air) if that better suits your requirements.
Navigating cabotage rules can be complex, but you can rest easy knowing our experts are here to guide you. We stay current on all relevant cabotage regulations, including:
-
Permit requirements for cabotage operations;
-
Specific cabotage rules for individual EU countries;
-
Our experience extends beyond just understanding the regulations.
Move your cargo efficiently within the EU with the support of AsstrA!