Legal Definitions - cabotage

Cabotage refers to the transport of goods or passengers between two points located within the same country, typically by sea, air, or sometimes inland waterways. This privilege is often restricted to domestic carriers—meaning vessels flying the national flag or airlines registered in that country—to protect local industries, ensure national security, and maintain economic control over internal trade routes.

• Maritime Example: Imagine a shipping company that wants to move a large consignment of automobiles from the port of Baltimore, Maryland, to the port of Houston, Texas. Under U.S. cabotage laws, such as the Jones Act, this domestic coastal shipping route must be performed by a vessel that is built in the U.S., owned by U.S. citizens, and crewed primarily by U.S. citizens. A foreign-flagged ship, even if it's cheaper to operate, would generally be prohibited from carrying out this specific domestic transport.

  This illustrates cabotage because the transport is entirely within the United States, and the law restricts this domestic trade to national carriers.

• Air Transport Example: Consider a scenario where a major Canadian airline, like Air Canada, wishes to offer a flight route carrying passengers directly from Los Angeles, California, to Chicago, Illinois. Under international aviation agreements and cabotage rules, Air Canada would typically not be permitted to operate this route. The right to transport passengers solely between two airports within the United States is reserved for U.S.-based airlines such as United Airlines or Southwest Airlines.

  This demonstrates cabotage as it involves air travel exclusively within one country, with the privilege of operating such routes reserved for domestic airlines.

• Inland Waterway Example: A company in Germany needs to transport industrial machinery by barge from a factory in Duisburg to a distribution center in Hamburg, both located along Germany's extensive river and canal system. German cabotage regulations for inland waterways would typically require this transport to be carried out by a German-flagged barge or a vessel operated by a German company, even if a cheaper Dutch or Polish barge operator were available.

  This example highlights cabotage in the context of inland transport, where the movement of goods between two points within Germany is reserved for national carriers.