Cabotage – definition and the most important information
Everyone associated with the transport industry is more or less familiar with the concept of cabotage. On the other hand, for people who are just beginners, the term may seem quite unfamiliar. There are number of rules that are worth knowing. Most are generalities, while some of them are tailored to the rules that apply in specific countries. Each forwarder, planner and carrier must know what they can and cannot do.
Every transport and forwarding company, and certainly ones that offer comprehensive services (such as EURO 24), is certainly well-versed in cabotage. Below, we have tried to explain the most important aspects that are related to this issue.
What is cabotage?
To put it simply, cabotage is the loading and unloading of goods in the same country by a carrier whose seat is located abroad. For example: a carrier from Poland carries out transport with loading in Dortmund and unloading in Frankfurt. The definition itself is nothing complicated, although regulations may make it sometimes not so obvious.
Why are cabotage restrictions imposed?
First, it is worth mentioning why restrictions are imposed on transport companies from abroad at all. This is mainly due to financial reasons. The point is precisely to properly protect the internal market of a given country. In individual countries, the costs of running transport companies are different, so the costs of transport operations are also at different levels.
A carrier from Ukraine may take into account lower costs of providing transport services than a carrier from Germany, which is due to at least several factors. Freight remuneration for transport in Germany or, for example, France, will be higher than in Ukraine. Hence the phenomenon in which such a large number of carriers from Eastern European countries decide to carry out transport in Western European countries. This has led some countries to decide on cabotage restrictions, all in order to protect domestic carriers from being displaced by cheaper ones coming from other countries.
The document that regulates the issues of cabotage
To achieve full understanding and clarity, each EU country uses the same cabotage rules. These are regulated in the Regulation of the European Parliament and of the Council (EC) No. 1072/2009 of October 21st, 2009. They are specified by the legal provisions that are in force in a specific country when it’s a member of the European Union. There are only a few aspects where national authorities can refine their provisions on domestic legislation, for example:
- In the subject of rules relating to the contract of carriage,
- For the weight and dimensions of road vehicles.
On the other hand, in none of the cases can these be provisions, that will favor domestic carriers in any way.
