Cabotage Rules for the Canadian driver

Cabotage Rules for the Canadian driver

Cabotage rules for Canadian drivers

One of the most popular questions we get asked is: can a Canadian driver do pickups and deliveries in the United States?  Most commercial drivers and carriers understand that inter-stating is typically not allowed, but there are unique situations they need clarification about.  For example, “Can I move empty trailers to a different point in the USA?  Can I pick up a load in the USA and deliver it to another point in the USA before picking up a load to go back to Canada if it is on route back to Canada?”

With this in mind let us review cabotage rules for Canadian drivers.

Cabotage rules for Canadian Drivers: a brief review

For the United States, Cabotage rules have two different regulatory bodies, 1) US Customs, and 2) The Immigration and Naturalization Service (INS).  Canadians must comply with both regulatory agencies to be compliant.

US Customs Regulations

Most people, even lawyers, point to 19 CFR 123.14 when asked about what a Canadian truck driver can and can not do in the United States.  It reads:

123.14 Entry of foreign-based trucks, busses, and taxicabs in international traffic.

(a)Admission without entry or payment of duty. Trucks, busses, and taxicabs, however owned, which have their principal base of operations in a foreign country and which are engaged in international traffic, arriving with merchandise or passengers destined to points in the United States, or arriving empty or loaded for the purpose of taking out merchandise or passengers, may be admitted without formal entry or the payment of duty. Such vehicles shall not engage in local traffic except as provided in paragraph (c) of this section.

(b)Deposit of registration by vehicle not on regular trip. In any case in which a foreign-based truck, bus, or taxicab admitted under this section is not in use on a regularly scheduled trip, the port director may require that the registration card for the vehicle be deposited pending the return of the vehicle for departure to the country from which it arrived, or the port director may take other appropriate measures to assure the proper use and departure of the vehicle.

(c)Use in local traffic. Foreign-based trucks, busses, and taxicabs admitted under this section shall not engage in local traffic in the United States unless the vehicle comes within one of the following exceptions:

(1) The vehicle may carry merchandise or passengers between points in the United States if such carriage is incidental to the immediately prior or subsequent engagement of that vehicle in international traffic. Any such carriage by the vehicle in the general direction of an export move or as part of the return of the vehicle to its base country shall be considered incidental to its engagement in international traffic. An alien driver will not be permitted to operate a vehicle under this paragraph, unless the driver is in compliance with the applicable regulations of the Immigration and Naturalization Service.

(2) A foreign-based truck trailer may carry merchandise between points in the United States on its departure for a foreign country under the same conditions as are prescribed for “other foreign railroad equipment” in § 123.12(a)(2).

I have on my desk a letter given to a carrier from a legal firm in the United States which was supposed answer this question:

Can you do movements within the US which are incidental to freight going back to Canada?

In other words, taking a shipment to a point in the United States from Canada, dropping the load, picking up a load destined to a point within the USA but on route back to Canada, drop this load, pick up another load going to Canada.  The legal firm answers the question by  quoting  a part of 19 CFR 123.14  specifically section C (1) which says:

(1)    The vehicle may carry merchandise or passengers between points in the United States if such carriage is incidental to the immediately prior or subsequent engagement of that vehicle in international traffic. Any such carriage by the vehicle in the general direction of an export move or as part of the return of the vehicle to its base country shall be considered incidental to its engagement in international traffic.

The legal firm goes on to say that because of this section which was adopted in 1998 and still stands, movements incidental to the movement of freight coming from Canada and going back to Canada it was acceptable.

What it omits is the final line of this section, the most important line:

An alien driver will not be permitted to operate a vehicle under this paragraph unless the driver is in compliance with the applicable regulations of the Immigration and Naturalization Service. 

This is an important point that cannot be overlooked.  It is also worth noting that this particular regulation focuses on the equipment, not the driver. So to answer our question: Can you do movements within the US which are incidental to freight going back to Canada?, we must next review the INS regulations.

INS Regulations

The Immigration and Naturalization Service has its own take on what a Canadian truck driver can and can not do in the United States.   Immigration regulations at 8 CFR214.2(b)(4) codify provisions found within NAFTA which allow Canadian and Mexican citizens to enter the United States as B-1 business visitors.  The intent of this provision was to enable free movement of goods from one country into another but not allow the B-1 business visitors access to the US labor market.  This distribution of goods is defined in 8 CFR 214.2(b)(4)(i)(E) which reads:

(E)Distribution.

(1) Transportation operators transporting goods or passengers to the United States from the territory of another Party or loading and transporting goods or passengers from the United States to the territory of another Party, with no unloading in the United States, to the territory of another Party. (These operators may make deliveries in the United States if all goods or passengers to be delivered were loaded in the territory of another Party. Furthermore, they may load from locations in the United States if all goods or passengers to be loaded will be delivered in the territory of another Party. Purely domestic service or solicitation, in competition with the United States operators, is not permitted.)

Let’s read the final line again:  Purely domestic service or solicitation, in competition with the United States operators, is not permitted.  The INS, therefore, does not allow purely domestic movements that US Customs allows. US Customs states that a driver must comply with INS rules. Once taking the INS rules into consideration, it makes it nearly impossible for a Canadian driver to both pickup and deliver within the United States. This makes the US Customs regulation allowing pickup and deliveries in the USA a moot point. In simple terms, the INS regulation overrides the US Customs on this one.

Putting US Customs and INS rules together

The CBP website has a few more details regarding the INS regulation, and it says in part

  • The goods must be entering or leaving the United States, and remain in the stream of international commerce.
  • Cargo that has its origin and final destination within the United States generally moves in the stream of domestic, rather than international commerce. Just because the goods originate from a foreign source, does not make these goods “foreign” for purposes of immigration laws. The goods must remain in the international stream of commerce – once they have come to rest they assume a domestic character.
  • A driver bringing goods from Canada or Mexico may transport those goods to one or several locations in the United States, and may pick up goods from one or several US locations for delivery to Canada or Mexico, but the driver may not load, haul, or deliver a cargo that is both picked up and dropped off at a destination within the United States.
  • The entry of the driver must be for the purpose of an international movement of goods.
  • Drivers may not engage in any activity that qualifies as local labor for hire.
  • The burden of proof remains with the driver to establish eligibility for entry.

The basic thing you can get from all this legal talk is, if you’re a Canadian you can not move freight point to point in the United States, period.

Here is what a Canadian truck driver can do in the United States

  • Drivers may deliver a shipment from Canada/Mexico to one or more US locations.
  • Drivers may then pick up a return shipment from one or more US locations for delivery to Canada/Mexico (generally must be pre-arranged).
  • Drivers may deliver a shipment from Canada/Mexico to a US location, deadhead with the same trailer to another US location, and live load that trailer for delivery to Canada/Mexico.
  • Drivers may deliver a shipment from Canada/Mexico to a US location, deadhead with the same trailer to another location, drop the empty trailer and pick up a second loaded trailer for delivery to Canada/Mexico.
  • Drivers may deliver a shipment from Canada to a US location, pick up the empty trailer and deadhead that trailer to another US location where the trailer is live loaded for delivery to Canada/Mexico.
  • Drivers may also drop a loaded trailer from Canada/Mexico at one location in the US, and drive an empty tractor to another location to pick up a loaded trailer for transport to Canada/Mexico.
  • Relay drivers may drive entirely domestic segments of an international delivery if the driver the delivery meets two conditions: 1) the driver must be employed by the same company as the delivery; and 2) the domestic portion of the trip is a necessary incident to the international nature of the trip. Relaying is permitted in order for drivers to comply with Federal regulations regarding the number of consecutive hours an individual is permitted to drive. They need not enter with the vehicle, but must enter within a reasonable period.
  • Drivers may perform activities that are “necessary incidents” of international commerce, such as loading and unloading international cargo.

In each situation above, each trailer must be used only in delivering goods either to or from the United States.

Here is a quick review of what a Canadian truck driver can not do in the United States :

  • Drivers may not pick up a shipment at one US location and deliver that shipment to another US location.
  • Drivers may not reposition an empty trailer between two points in the United States when the driver did not either enter with or depart with that trailer.
  • Drivers may not “top up” an international shipment with US domestic shipments.
  • Drivers may not solicit shipments for domestic deliveries while in the United States.

Final words about unique drivers

If you have special considerations such as dual citizenship, or Status Indian, you may want to consult with a United States Immigration specialist to find out what you are legally allowed and not allowed to do as a Canadian based driver using Canadian vehicles.  By in large, vehicles registered in Canada are only allowed to enter the United States for international trade, not local trade.

We don’t claim to be legal experts and since violation of INS regulations has such a high cost for the driver, who is ultimately responsible to work within the legal perimeters of both INS and US Customs, seeking appropriate legal counsel is well worth the cost.  Too often we hear of drivers and carriers receiving bad advice from people who only care about profit from moving the freight, rather than the driver and the resulting consequences if caught making illegal freight movements.

We hope this overview of cabotage rules for Canadian drivers helps shine some light on a rather confusing subject.

Sources and applicable law

Reprint of Cabotage rules from FMCSA

CBP guidelines for Canadian drivers

CFR 214.2

CFR 123.14

2018-05-08T21:39:46+00:00May 24th, 2017|trucking, Uncategorized, United States, US Regulations|

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