This one goes back a long way, in fact, centuries.
But first, what is cabotage and why does it matter?
Q: Can a Canadian truck pick-up and deliver the same freight within the U.S.?
Q: Can a U.S. truck pick-up and deliver the same freight within Canada?
A: No, in both cases. These are examples of cabotage, the domestic movement of freight by a foreign entity.
In the 18th and 19th centuries, European ships plied the Atlantic coast of North America, bringing basic goods from the motherland, and returning with more exotic products, such as furs and tobacco for the upscale European market. At the same time, there was internal trade between the Atlantic colonies, with goods moving northbound and southbound along the coast between the coastal towns.
This internal trade presented a great opportunity for the European merchant marine to fill out its ships with local goods as they went up and down the U.S. coast. However, every shipment moved by a European ship was one less shipment that would be available for a U.S. vessel. And because the Europeans were making the trip anyway, and because their ships were typically larger, the Europeans could almost always under-price and over-serve relative to the local American ships.
So a set of U.S. laws were passed that made it illegal for a foreign (e.g., European) ship to carry domestic (i.e., U.S. to U.S.) shipments. The practice that was outlawed by these laws was called Cabotage. And cabotage is illegal to this day in the shipping industry.
And when the internal combustion engine was invented and put in trucks that could carry freight, the cabotage practice was also made illegal, with very limited exceptions, in the trucking industry. Canadian drivers and trucks cannot handle domestic shipments between U.S. points, and U.S. drivers and trucks cannot handle domestic shipments between Canadian points. And just as they would seize ships in the olden days and lock up their crews, they seize trucks and lock up their drivers today. The penalties are serious.
So when you are planning shipments, don’t plan cabotage moves: we won’t arrange them for you.