Cabotage rules for Canada–U.S. trucking

Cabotage is hauling freight between two points inside a country with a truck or driver from somewhere else. A Canadian carrier's driver may deliver Canadian freight to U.S. points and pick up U.S. freight bound for Canada, but may not pick up and deliver the same shipment inside the U.S. Canada applies the same idea to U.S. carriers, with a narrow allowance for one incidental domestic move by the truck.

Two separate rules decide every move. A customs rule governs the truck and trailer. An immigration rule governs the driver. A load has to pass both, and the driver rule is usually the stricter one. This article reads the official text on each side, then walks through R. Diaz's round trip to Joliet from our cross-border page. It isn't legal advice: customs and immigration counsel decide the edge cases.

What is cabotage in trucking?

DHS's cross-border trucking guidelines define it as point-to-point transportation of property or passengers within one country. For a Canadian carrier in the U.S., that means a load that is picked up and delivered on the U.S. side of the border. For a U.S. carrier in Canada, it's a load that starts and ends in Canada.

What makes a load international is where the goods start and end, not the road the truck takes. CBSA's Memorandum D3-1-5 says this outright: international status "is based on the origin and destination of the goods carried." The DHS guidelines add that goods which "come to rest" at a drop lot or warehouse for reasons other than customs clearance take on a domestic character.

What does the U.S. customs rule say about Canadian trucks?

The rule is 19 CFR 123.14. A truck whose principal base of operations is outside the U.S. may enter without formal entry or duty when it's engaged in international traffic. It may not engage in local traffic, with two exceptions:

• Incidental carriage. The truck may carry freight between U.S. points if that's incidental to its immediately prior or next international trip. A move in the general direction of an export pickup, or part of the truck's return to its base country, counts as incidental.
• Trailers leaving the country. A foreign-based trailer may carry freight between U.S. points on its way out, under the rail-equipment test in 19 CFR 123.12(a)(2): local traffic "reasonably incidental" to its prompt departure.

The same paragraph adds that a foreign driver may use the incidental exception only if the driver complies with immigration rules. Misusing a vehicle can bring liability under 19 U.S.C. 1592, which 123.14(d) cites. The regulation itself doesn't set a "direct route" test or cap the number of incidental moves. If a rule of thumb you've heard adds either, ask your customs broker or counsel where it comes from.

FMCSA's own written ban on U.S. point-to-point service, in 49 CFR 365.501(b), applies to Mexico-domiciled carriers. For Canadian carriers, CBP's May 2025 CTPAT alert points to 19 CFR 123.14(c) as the rule.

What can a Canadian driver do in the U.S.?

Foreign truck drivers, Canadians included, can be admitted as B-1 visitors for business. Under the free trade agreement, 8 CFR 214.2(b)(4)(i)(E) covers transportation operators who bring goods into the U.S., or load goods in the U.S. for delivery to Canada or Mexico. They may deliver at U.S. points only goods loaded outside the U.S., and load at U.S. points only goods leaving the country. The same paragraph says purely domestic service "is not permitted."

CBP's page on entering as a commercial truck driver says the same in plain terms: the driver may not haul a cargo that is picked up and dropped off within the U.S. Loading and unloading that is incidental to the international trip is allowed.

The DHS guidelines give the working list. Permitted for the driver:

• Deliver a Canadian load to one or more U.S. points.
• Pick up a return load at one or more U.S. points for delivery to Canada, generally pre-arranged.
• Deadhead to a U.S. pickup with the trailer the driver came in with, or the one the driver will leave with.
• Drop a loaded trailer, then run bobtail to pick up a loaded trailer headed for Canada.

Not permitted for the driver:

• Pick up at one U.S. location and deliver to another.
• Reposition an empty trailer the driver didn't enter with or leave with.
• "Top up" an international load with U.S. domestic freight.
• Solicit domestic loads while in the U.S.

The FAQ in the same document closes the gap with 123.14. Asked whether a driver heading home may carry freight to another U.S. point because it's on the way, DHS answers: not if the driver is admitted as a B-1. So even where the truck might qualify for incidental carriage, the driver usually doesn't.

What are the rules for U.S. trucks and drivers in Canada?

The truck. Memorandum D3-1-5 (August 26, 2024) covers foreign-based conveyances, containers and trailers imported under tariff items 9801.10.10, 9801.10.20 and 9801.10.30. Trucks and trailers may stay 30 days. A U.S.-based truck or trailer may move goods between two points in Canada only if the move comes immediately before or after an international trip and it:

• moves in the general direction of the international load's delivery point, or
• entered Canada empty to pick up an export load, or
• will pick up an export load after delivering its international load, or
• is part of the truck's return to its home country.

It is limited to one such point-to-point move, on a route consistent with the international movement. An empty truck entering to pick up an export load may make one move on the inward leg, and the export load should be scheduled before it enters. Empty moves between two Canadian points aren't restricted at all. A truck carrying domestic goods Canada–U.S.–Canada, or U.S.–Canada–U.S., gets no incidental domestic move.

The driver. Under section 186(a) of the Immigration and Refugee Protection Regulations, a business visitor may work without a work permit. Section 187 defines one as someone doing international business without directly entering the Canadian labour market. IRCC's CUSMA business visitor instructions cover U.S. and Mexican transport truck drivers and relay drivers hauling goods into or out of Canada. They also say cabotage, pick-up and delivery of the same goods between two Canadian locations, "is not allowed."

So Canada has the same split as the U.S. D3-1-5 gives the truck one incidental move. IRCC gives the driver none. D3-1-5 itself tells carriers to contact IRCC when a driver isn't a Canadian citizen or permanent resident.

Which moves are allowed on each side?

Where a cell says the truck may but the driver may not, the load isn't allowed for that driver. Where the official page is silent, ask counsel rather than reading permission into the silence.

How does this play out on a real trip?

On Tuesday, R. Diaz takes load 48213 from Mississauga ON to Joliet IL for Prairie Foods: 488 miles over the Blue Water Bridge. It arrives at 14:40 CT, and the POD is signed at 18:00 CT. That's an inbound international delivery, which every rule above allows. Assume, for this example, that he enters the U.S. as a B-1 business visitor.

Then dispatch needs a way home. Three candidates:

Joliet → Chicago is the textbook case in the DHS list: picked up at one U.S. location, delivered to another. The Chicago → Detroit version fails for the reason in the DHS FAQ, since being on the way home doesn't make U.S. freight international for a B-1 driver. Chicago → Windsor is fine because the goods leave the country. On our Truckload page it ranked third at $3.40 USD a total mile and was passed on because its pickup was by 16:00, while he was still at the Joliet dock.

The backhaul the plan drafted is 48233, Elwood IL → Mississauga ON for Northgate Home, moved to Wednesday 07:00. It's an export pickup, so it's allowed. The 38 empty miles from Joliet to Elwood are a deadhead, which DHS permits with the trailer he came in with or the one he leaves with. The mileage and revenue below are the Truckload page's example figures:

The round trip is 1,000 + 50 = 1,050 miles, and 1,000 ÷ 1,050 = 95.24% of them loaded. 48233 pays $2,640.00 USD over 512 + 38 = 550 miles, so US$2,640.00 ÷ 550 = $4.80 USD a mile. The legal load is also the better-paying one, which isn't always true. When it isn't, the flag still stands.

Canada has the mirror case. T. Okafor's 48224, Windsor ON → London ON, is an ordinary domestic load for Ashgrove Freight, a Canadian carrier. The same load on a U.S.-based truck, right after a delivery into Windsor, might fit D3-1-5's one incidental move for the truck. But a U.S. driver admitted as a business visitor would be doing cabotage under IRCC's instructions, so it goes to counsel before anyone accepts it.

How should a TMS hold this?

A TMS can't decide cabotage. It can make sure the question comes up before a load is tendered, not after the driver is in Chicago:

• Origin and destination country on every load, so a fully domestic load for a foreign-based truck is visible at planning time.
• The carrier's base country and the driver's status on the assignment, since the truck rule and the driver rule are separate tests.
• The inbound and outbound trips linked, so an incidental move can be checked against the international trip before and after it.
• Trailer history, since a U.S. deadhead is allowed only with the trailer the driver came in with or leaves with.
• Driver documents with expiry dates. CBP's CTPAT alert says a FAST driver caught doing cabotage may lose the card.

Roadmark's part is the flag, not the ruling. On the cross-border page, a fully domestic U.S. backhaul for a Canadian carrier is a flag, not a default, and planning looks for a load that starts or ends in Canada instead. That's why 48233 was drafted rather than Joliet → Chicago. The flag points a dispatcher at the question; the carrier's own compliance rules decide the answer. Document expiries are tracked like any other compliance date. A. Brandt's FAST card expires November 3, 35 days after September 29, and the cross-border page's assignment check already shows it. On the carriers page, the plan stops assigning anything that would expire mid-trip, and reminders go out weeks ahead.

For the paperwork on loads that do cross, see ACE and ACI eManifest for highway carriers. For the two-currency side of the same trip, see billed in USD, paid in CAD.