Glossary

Cabotage

Definition

Cabotage refers to the transportation of goods or passengers between two points within the same country, typically carried out by a foreign carrier or vehicle. While the term originally emerged in the maritime domain, it has broadened to encompass road and air transportation. In road freight logistics, cabotage is associated with a foreign trucking company or driver delivering domestic transportation services within a country other than their own. The regulations surrounding cabotage aim to strike a balance between protecting domestic carriers and fostering fair competition within the transportation industry. These regulations are country-specific or set by regions like the EU, and their details can significantly vary.

— sennder Team

FAQ

Cabotage holds significance in road freight logistics as it influences the participation of foreign carriers in domestic transportation markets. The regulations around cabotage aim to optimize route efficiency by reducing the number of empty trips made by carriers, which in turn, can lower transportation costs and benefit consumers. Moreover, these regulations help maintain a level playing field between domestic and foreign carriers, ensuring a competitive and fair market environment.
Cabotage regulations in road freight logistics may include restrictions on the number of domestic transport operations a foreign carrier can perform within a certain time frame, limitations on the types of goods that can be transported, or requirements for obtaining special permits or licenses to perform cabotage services.
Cabotage affects shippers by potentially limiting the availability of carriers for domestic transportation services, which may impact the cost and efficiency of their supply chains. For carriers, cabotage regulations can restrict access to certain markets, limiting their ability to expand operations and diversify their client base.

Example or usage in road freight logistics:

A trucking company from Country A transports goods to Country B. Upon delivery in Country B, the company is offered a domestic transportation job within Country B. However, due to cabotage regulations, the foreign trucking company is unable to undertake the domestic job and must return to Country A without additional cargo, unless it complies with the cabotage regulations of Country B, which might allow a limited number of domestic transports.

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