Why U.S. Freight is so different from Canadian Freight – 10 Part Series – Part 2

How Immigration Laws (Cabotage Rules) Affect Canada/US Transborder Logistics

Can Canadian Freight Companies pick up and deliver in the US and then pick up another shipment enroute to Canada and then deliver in Canada?

We get this question all the time. From a logistics perspective if the truck is travelling past two points that are a pick up and a delivery within the US on the way back to Canada, it just makes economic and logistical sense for the driver to complete that shipment. However, the general answer is no, the driver from Canadian freight companies cannot (unless permitted to work in the US). A shipment picked up and delivered in the US is considered to be a domestic movement and a Canadian driver is not allowed to do it.

Typically called Cabotage Rules, there are two sets of regulations that define what a Canadian carrier is permitted to do within the US when the driver is not a US citizen, nor permitted to work in the US. The first sets of regulations are US Customs Regulations, the second set are the INS Regulations. These regulations are generally in agreement, but there are a few differences.

Rules Under INS Regulations & US Customs Regulations

Permitted	Not Permitted
Pick up in US and Deliver in Canada Pick up in Canada and Deliver in US Physical labour to load/unload a shipment in international commerce. Drop and switch trailers as long as it’s an international shipment.	Pick up and deliver the same shipment within the US. Solicit for shipments while in the US. Move an empty trailer from one location to another.

US Drivers in Canada

The Canadian rules for Cabotage are almost identical to those in the US. The same actions that are permitted and not permitted in the US are reciprocal to US Drivers operating in Canada.

Exception: “A domestic movement incidental to the immediate prior or subsequent engagement”

Let’s say you have a shipment from Chicago to Toronto, but you also have a shipment from Chicago to Detroit and another from Detroit to Toronto. It just makes sense to do these all on the same truck (provided they fit) en route. This is an exception that is allowed since the shipment is considered incidental to the prior or subsequent engagement.

The key to applying this rule is that an export shipment must be picked up at the location the domestic movement is delivered.

Implications For Logistical Planning of Transborder Shipments

Generally, you want to group all your US origins with similar destinations in Canada. This will reduce empty miles and maximize the use of your line haul. Unless you can meet the very narrowly defined exception to the rule, this should be your planning strategy.

Similarly, you should group all your Canadian origins with similar US destinations for planning purposes.

If you need assistance planning and minimizing costs on transborder freight,  or just looking for Canadian freight companies, contact DSN Chemical Transportation for an expert review of your current logistics plan.

Disclaimer

The above constitutes some general rules for logistical planning and should not be considered legal advice. Please consult a legal advisor specializing in this field for further clarification.