U.S. cabotage rules for Canadian-based drivers operating in the United States

Scope

Canadian motor carriers and drivers are required to comply with U.S. rules and regulations relating to cabotage while in the United States.

Regulatory citations

• Guidelines for Compliance of Commercial Motor Vehicles (CMV) and CMV Drivers Engaged in Cross-Border Traffic (May 2012)
• Treasury Decision (T.D.) 99-10 published in the Federal Register dated February 16, 1999
• 19 USC Part 1592 — Penalties for fraud, gross negligence, and negligence
• 19 CFR 123.14 — Entry of foreign-based trucks, busses, and taxicabs in international traffic

Key definitions

• Cabotage: The point-to-point transportation of property or passengers.

Summary of requirements

The following document only paraphrases the regulations on cabotage of the US Citizenship and Immigration Service and the Customs and Border Protection Service of the Department of Homeland Security. The contents may not be relied upon as a substitute for the official regulations. Although the FMCSA makes every effort to assure that the information provided is complete an accurate, it is not intended to take the place of published regulations of the U.S. Department of Homeland Security’s U.S. Citizenship and Immigration Services or Customs and Border Protection Service.

For questions on those regulations, contact the U.S. Citizenship and Immigration Services at (800) 375-5283 or the Customs and Border Protection Service at (877) 227-5511. You may also contact them through their website.

• Generally, Canadian motor carriers are prohibited from operating in domestic or point-to-point transportation in the United States.
• All movements by Canadian carriers must be international in nature.
• U.S. Customs and Border Protection rules allow for point-to-point domestic movement incidental to the immediate prior or subsequent engagement of a vehicle in international transportation; however, immigration rules prohibit this type of movement and therefore the domestic movement is not allowed.

General cabotage requirements. The following is synopsis of the rules and regulations relating to cabotage and Canadian driver requirements.

Customs and Border Protection Requirements.

• Domestic moves. Generally, Canadian carriers are prohibited from engaging in domestic traffic in the United States. Canadian carriers are allowed to make international moves. Determination of the type of traffic (international or domestic) is based on the origin and destination of the cargo. Vehicles engaged in the transportation of cargo originating in Canada and terminating in the United States or Mexico is considered an international move. This includes vehicles transporting cargo for only a part of the complete international trip.
• Repositioning of empty vehicles. The movement of empty vehicles between two points in the United States is not considered a domestic move. The Customs and Border Protection no longer defines an empty vehicle as “merchandise” and, therefore, the repositioning of empty vehicles does not involve the transportation of merchandise. Canadian carriers are allowed to reposition empty vehicles within the United States.
• In-transit cargo. In-transit cargo refers to the transportation of merchandise having both a U.S. origin and destination that travels through Canada. For example, merchandise transported between Buffalo, NY and Detroit, MI that goes through Ontario is in-transit cargo. The transportation of in-transit cargo either entering or leaving the United States on Canadian-based vehicles is allowed provided either prior or subsequent transport is performed by U.S.-based vehicles. Using the example above, a Canadian carrier would be allowed to transport merchandise with an origin of Buffalo, NY and a destination of Detroit, MI provided some portion of the trip was performed by a U.S.-based carrier (Buffalo, NY, to Windsor, ON, a Canadian-based vehicle; Windsor, ON, to Detroit, MI, on a U.S.-based vehicle).
• Use of Canadian-based vehicles for domestic transportation. Generally, the use of Canadian-based vehicles for domestic movement of merchandise is prohibited. The customs requirements allow for a domestic movement incidental to the immediate prior or subsequent engagement of a vehicle in international transportation is allowed. Incidental is defined as “in the general direction of an export move or as part of the return movement to their base country.” It includes a movement en route to the pick-up of an export move. For example, a Toronto, ON-based carrier transports merchandise originating in Toronto and terminating in Miami, FL. The vehicle can then be used to pick up merchandise in Miami for delivery to St Louis, MO (a domestic move) where an export move will be picked up for delivery to Canada. The movement of merchandise from Miami to St. Louis is considered incidental to the immediate prior or subsequent engagement of such vehicle in international transportation. The Canadian-based vehicle can also transport a domestic move in the general direction of an export move and then immediately return empty to Canada. However, because immigration rules prohibit these types of movements, such movements are not allowed under immigration rules.

Customs and Immigration Service Requirements.

• Temporary visitors for business. Canadian truck drivers must meet the general entry requirements as a visitor for business. It must be established that Canadian drivers:
  • Have a residence in a foreign country which the driver has no intention of abandoning;
  • Intend to depart the United States at the end of the authorized period of temporary admission;
  • Have adequate financial means to carry out the purpose of the visit to and departure from the United States; and
  • Are not inadmissible to the United States under the provisions of Section 212(a) of the INA, which includes such grounds of inadmissibility as health related, criminal, subversive, public charge, improper manner of arrival or improper documents, other immigration violations and several other categories of ineligibility.
• Documentary requirements. Each applicant for admission as a visitor for business is required to satisfy the inspecting officer of his or her citizenship. An oral declaration may be accepted or the inspecting officer may request supporting documentation. Such documentation may include, but is not limited to, a passport, a birth certificate, or a certificate of citizenship.
• Key principles relating to cabotage. Canadian based-drivers:
  • May be admitted to deliver or pick-up cargo traveling in the stream of international commerce.
  • May not engage in point-to-point hauling within the United States.
  • May not engage in any activity that qualifies as local labor for hire.
• Customs and Immigration Services regulations. Canadian-based drivers may transport goods or passengers to the United States from Canada if all goods or passengers to be delivered were loaded in Canada. Likewise, Canadian-based drivers may load and transport goods or passengers from the United States to Canada provided no unloading occurs in the United States. They may also load goods or passengers at various locations in the United States only if all goods and passengers will be unloaded in a foreign country.

Purely domestic service (point-to-point within the United States) is not permitted.

Solicitation, in competition with U.S. operators, is not permitted. This means that a Canadian-based driver cannot solicit a return load for delivery to Canada while in the United States. Any return load must be pre-arranged.

Customs rules vs. immigration rules. Customs and Border Protection regulations allow for Canadian-based vehicles to transport domestic shipments (point-to-point in the United States) when the shipment is incidental to the immediate prior or subsequent engagement of the vehicle in an international movement. Customs and Immigration Service regulations do not allow a Canadian-based driver to pick up a shipment at a location for delivery to another location. It should be noted that the Customs and Border Protection regulations provide that the Canadian-based driver must be in compliance with the applicable Customs and Immigration Service regulations to operate a vehicle in this type of move. Because the Customs and Immigration Service regulation prohibits this type of move, in effect, the Customs and Border Protection regulation is moot at the present time.

Customs and Border Protection regulations do not consider the repositioning of any empty trailers domestic transportation and allow Canadian-based drivers to execute such movements. Customs and Immigration Service regulations prohibit Canadian-based drivers from repositioning empty trailers unless the driver either entered with or departed with that trailer.

Examples of permissible movements by Canada-based drivers:

• A shipment from Canada to one or more locations within the United States.
• A return shipment from one or more United States pick-up locations for delivery to Canada provided the pick-ups were pre-arranged.
• Delivery of a shipment from Canada to the United States, drive with the same empty trailer to another United States location, live load that trailer for delivery to Canada.
• Delivery of a shipment from Canada to the United States, drive with the same empty trailer to another United States location, drop the trailer, pick up a second loaded trailer for delivery to Canada.
• Delivery of a shipment from Canada to the United States, pick up a different empty trailer and drive to another United States location, live load that trailer for delivery to Canada.
• Delivery of a loaded trailer from Canada to one United States location, drive the tractor (with no trailer) to another United States location to pick up a loaded trailer for delivery to Canada.
• Canadian relay drivers may drive entirely domestic segments of an international move. For example, a Canadian driver may drive a vehicle (transporting an international shipment originating in New York City and destined for Montreal, PQ) from New York City to Albany, NY where another Canadian driver takes over and completes the trip by driving from Albany, NY to Montreal, PQ. The driver does not need to enter the United States with the vehicle, but must enter within a reasonable period.
• Drivers may perform activities that are “necessary incidents” of international commerce, such as loading or unloading international cargo.
• Drivers may be paid by a U.S. carrier/employer, provided the driver is engaged solely in the international delivery of goods and cargo to or from the United States. The driver must qualify as a visitor for business.

Examples of movements not permitted by Canada-based drivers:

• Pick up a shipment at one location for delivery to another location
• Reposition an empty trailer between two points in the United States when the driver did not either enter with or depart with that trailer.
• Pick up additional domestic shipments to fill up a partially filled trailer carrying an international shipment.
• Solicit shipments for delivery while in the United States.