Cabotage transport – what is it?

Cabotage transport, commonly referred to as cabotage, is a term used in international transport that describes the commercial transportation of goods within one country by a carrier registered in another country, typically as part of an international transport operation.

The primary objective of cabotage is to optimize transport costs and reduce empty runs, meaning trips made without cargo. Implementing cabotage can significantly improve the profitability of a transport company and increase the efficiency of international logistics.

To fully understand how cabotage works, it is essential to explore the regulations governing it. In the European Union, cabotage is strictly regulated to ensure fair competition and protect domestic markets.

If you want to learn more about cabotage and the legal framework it falls under, this article is for you.

Cabotage – definition of cabotage transport

Cabotage refers to the practice of performing transport operations between pick-up and drop-off points within a same country by a foreign carrier. In other words, a transport company registered in one country carries out domestic transport in another country without needing to return to its home country after each delivery (subject to specific rules, which we will discuss later in this article).

Example of cabotage transport

Let’s consider a Polish transport company that delivers goods from Warsaw to Berlin. After unloading the cargo in Berlin, instead of returning to Poland empty, the carrier accepts a job transporting goods from Berlin to Munich.

This domestic transport operation within Germany, carried out by a Polish haulier, is an example of cabotage.

Cabotage rules – EU Regulation and the Mobility Package

Cabotage transport within EU member states is regulated by the Regulation (EC) No 1072/2009 of the European Parliament and Council and the EU Mobility Package.

Under these regulations, a carrier registered in one EU member state can perform cabotage operations in another member state under the following conditions:

• Cabotage within the host country – A maximum of three cabotage operations is permitted within the host countryfollowing an international transport delivery.
  
  If two or three cabotage operations are performed, they can only start after the last unloading of the international transport. In this case, the seven-day limit for cabotage operations begins after the final unloading.
  
  A single cabotage operation can begin immediately after a partial unloading from an international transport.
  
  It must be completed within seven days from the first unloading of the international shipment.

• Cabotage in a different member state than the host country – A carrier is allowed only one cabotage operation in another EU country (other than the host country).
  
  This operation must be completed within three days of crossing the border into the second member state.
  
  The absolute deadline is seven days after the final unloading in the host country.
  
  The vehicle must be completely unloaded before entering the second country for cabotage.

Additionally, once the maximum number of allowed cabotage operations has been completed, the carrier must leave the country and wait four days (counted from midnight following the last cabotage operation) before undertaking new cabotage operations in that country. This is known as the cooling-off period.

These rules aim to balance the interests of transport operators from different countries and prevent unfair use of cabotage.

However, the introduction of such regulations has sparked mixed reactions. Some argue that the EU Parliament and Council regulations are too restrictive, limiting economic freedom. Others believe that these rules are necessary to protect local markets from unfair competition.

Requirements for carriers performing cabotage

Complying with cabotage regulations is not only crucial for legal operation but also plays a vital role in ensuring the security of a transport business.

Failing to properly document cabotage operations or exceeding operational limits can result in severe penalties, including bans on operating in certain countries. It’s similar to driving a car without a valid driving license—technically possible, but the risks are far too high.

To legally perform cabotage, a carrier must meet several additional requirements.

Same vehicle requirement

Cabotage must be performed using the same vehicle that was used for the preceding international transport operation. It is not permitted to use a different vehicle for cabotage operations.

Transport documentation

Every cabotage transport operation must be accompanied by mandatory transport documentation, including:

• CMR waybill – The main international document serving as proof of transport service completion.
• Waybills – Issued for each cabotage operation performed.
• Invoices – Received for each completed cabotage transport.

Some EU member states may require additional documentation, depending on national laws. Maintaining complete and accurate records is essential, as failure to provide proper documentation during a roadside inspection can lead to heavy fines and penalties.

Community License requirement

A Community License is a mandatory document that allows carriers to legally perform international road transportwithin the European Union using a vehicle with a Gross Vehicle Weight (GVW) over 3.5 tonnes.

Obtaining this license is essential for any transport company wishing to legally perform cabotage operations.

Compliance with national regulations

A carrier must adhere to the laws of the country where cabotage is performed, including:

• Driver working hours regulations
• Vehicle technical requirements
• Taxation rules

It is highly recommended to regularly check updates to national cabotage regulations. This helps avoid unexpected compliance issues, ensuring that the company meets all current legal requirements when performing cabotage in different countries.

3 Benefits of cabotage transport

Cost optimization

Cabotage enables carriers to maximize the utilization of their resources, directly leading to lower operational costs. In practice, when a haulier completes an international transport to another country, they can accept additional cabotage transport jobs within that country. This prevents empty runs—where the vehicle would otherwise return to its home country without cargo.

Minimizing empty runs not only reduces fuel consumption and other operating expenses but also lowers the carrier’s carbon footprint. This is particularly important in light of increasing environmental regulations and the push for sustainable logistics solutions.

With rising fuel prices and fleet maintenance costs, optimizing resources is becoming a crucial strategy. Each additional cabotage transport job can positively impact a carrier’s financial performance.

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Cabotage and increased competitiveness

The ability to perform cabotage transport provides carriers with a significant competitive advantage. By taking on additional transport jobs in a foreign country, hauliers become more flexible and versatile.

Since vehicles return home less frequently without cargo, operating costs decrease, allowing transport companies to offer lower rates to customers. This makes them a more attractive option compared to competitors.

Additionally, greater flexibility in fulfilling orders means faster responses to customer demands, which helps build trust and long-term loyalty. As a result, companies that successfully perform cabotage transport can secure more contracts and maintain lasting relationships with clients by providing cost-effective, reliable services.

Improved availability of transport services

Cabotage also increases the overall availability of transport services in the market. Clients relying on international transport providers, including those offering cabotage, have greater access to transport options.

A wider availability of hauliers fosters healthy market competition, which can lead to lower transport prices and improved service quality.

Limitations and challenges of cabotage

Despite its numerous benefits, cabotage transport also comes with several limitations and challenges:

• Quantitative and time restrictions – EU regulations limit the number of cabotage operations a carrier can perform in a single member state and impose time constraints on their completion, which may restrict business opportunities for hauliers.

• Differences in national regulations – Each EU member state may have specific national laws regarding cabotage, requiring carriers to be familiar with local regulations and ensure full compliance.

• Inspections and penalties – Violating cabotage regulations can result in severe penalties, including the suspension or revocation of a Community License (required for international transport) and the withdrawal or suspension of a driver’s certificate. Additionally, hauliers and drivers may face heavy fines, reaching up to tens of thousands of euros.

Summary

Cabotage transport plays a significant role in modern road freight operations, enhancing efficiency in international transport and maximizing resource utilization. It is a key logistics strategy that allows road hauliers to remain competitive while optimizing operating costs.

However, to fully benefit from cabotage opportunities within EU countries, carriers must strictly adhere to EU regulations and comply with the specific national rules of each member state where cabotage is performed.

Frequently asked questions (FAQ)

Can any carrier perform cabotage transport?

No, only carriers holding a valid Community License are permitted to legally perform cabotage operations. Additionally, they must comply with specific legal requirements, including those outlined in the European Parliament Regulation on cabotage transport.

How many cabotage operations can be performed in one country?

According to EU rules & regulations and cabotage laws – within the host country, a carrier can perform up to three cabotage journeys within seven days following the unloading of an international transport delivery.

In another EU country (other than the host country), only one cabotage operation is allowed, which must be completed within three days after crossing the border into that country, and within a maximum of seven days from the unloading in the host country.

After completing the maximum number of allowed cabotage operations, the vehicle must leave the country for at least four full days before being allowed to perform cabotage again in that country.

What does cabotage mean?

Cabotage refers to the transport of goods within a single country by a carrier registered in another country (foreign operators).

For example, if a German transport company, engaged in international road transport, delivers goods between Warsaw and Kraków, this would be considered cabotage within Poland.