Cabotage

Cabotage refers to the transport of cargo or passengers by sea between two points within the same country, the domestic, coastal trade, as opposed to international voyages between countries. The word has come to be associated above all with the laws that many nations apply to this trade. Because domestic shipping is seen as important for the economy, employment and national security, a large number of countries reserve their cabotage to ships that meet national requirements — typically ships that are registered under the national flag, and often also built domestically, owned by nationals and crewed by nationals, so that foreign-flag ships may not carry cargo or passengers between two of that country's own ports.

The purpose of cabotage laws is to protect and sustain a domestic merchant fleet and the shipbuilding, seafaring and related industries that go with it, and to keep this capacity available for the country's own needs, including in emergencies. Well-known examples include the United States, whose Jones Act requires vessels in domestic trade to be US-built, US-flagged, US-owned and US-crewed, and many other countries have their own cabotage regimes of varying strictness, while some regions, such as parts of the European Union, have liberalised cabotage among their members.

Cabotage rules have significant commercial effects. They can raise the cost of domestic sea transport where national ships are more expensive to build or operate, they shape which vessels can serve particular trades, and they influence the structure of shipping and offshore industries in the countries that apply them. They are also the subject of continual debate between those who see them as vital protection for national maritime capability and those who regard them as a barrier to competition and efficiency. For anyone involved in shipping serving a particular country's coast, understanding that country's cabotage regime is crucial, since it determines which ships may lawfully carry the trade.