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Considering cabotage for the Nautilus nations

11 March 2024

Nautilus has pledged to campaign to 'grow domestic shipping' in the countries where the Union operates – a policy passed by a vote of members at the 2023 General Meeting. Most of the world's maritime countries back their own fleets through cabotage laws, so a fresh look at these must be on the cards for the UK and Netherlands. Andrew Linington explores the history of cabotage and how laws aimed at growing domestic shipping work around the world today

Debates over countries' rights to restrict shipping services in their waters to national flag vessels – commonly described as cabotage – have raged for many centuries and continue to reverberate today.

England, France and Portugal were among the early adopters of measures to protect their shipping from foreign competition, and today, in response to post-pandemic concerns about the fragility of supply chains, more and more countries are facing pressure to take similar action.

The UK: an early adopter of cabotage

It's almost 650 years since some of the first rules preventing foreign ships from carrying domestic imports and exports were introduced, when a 1381 Act was adopted by King Richard II in an attempt to 'increase the Navy of England, which is now greatly diminished'.

Unfortunately, the English fleet was so diminished it proved impossible to enforce the rules as there were not enough ships to carry all the trade. But fast forward to the middle of the 1600s, and continued concerns about shortfalls in the supply of English ships and seafarers prompted the introduction of the Navigation Acts, with fresh requirements for the use of English ships for imports and exports. From 1660, the legislation completely reserved the coastal trades for English ships, whose crews had to be at least three-quarters composed of English seafarers.

The Navigation Acts were in place for nearly 200 years, until they were swept away by the Victorian zeal for 'free trade' and – despite calls from Nautilus and its predecessors over many decades – British shipping has been left to fend for itself since then.

UK and Netherlands now in the minority

As Nautilus has repeatedly pointed out, the UK has become increasingly out of step with the policies pursued by many other major maritime nations. The possibility of using so-called 'Brexit freedoms' to introduce controls on shipping operations in UK waters has been floated – especially in the growing offshore wind energy industry – and in 2018 Nautilus urged the UK and the Netherlands to reintroduce cabotage protection laws after a report published by Seafarers' Rights International (SRI) revealed that more than 90 countries, accounting for 80% of the world's maritime states, had some form of regulation in place.

The research indicated that the scale of cabotage regulations around the world was much larger than previously thought and had also increased significantly. It noted that the few leading maritime nations with no cabotage restrictions included the UK, the Netherlands, Denmark and New Zealand.

What actually is cabotage?

The SRI study – said to be the most comprehensive analysis of its kind for a quarter of a century – pointed out that there is no single, internationally agreed or legally-binding definition of cabotage.

Wherever we are, we will prosecute the case for national seafarers working on their own coastlines, and we remain resolute in our commitment to the long-term viability of our domestic shipping industries ITF president Paddy Crumlin

In turn, the measures taken by different countries vary widely, while generally seeking to protect the national flag and seafaring skills and expertise, to promote national ship ownership, building and supply services, safeguard national security and safety, ensure fair competition and environmental protection, and to encourage transport by sea. The diverse forms of cabotage include:

  • restrictions on the carriage of goods or passengers between a state's ports
  • controls on the provision of offshore supply services
  • conditions on the operation of services within territorial waters, covering such factors as ship registration and ownership, crew nationality, and vessel construction

Work is now underway on a major update of the 2018 study, and SRI executive director Deirdre Fitzpatrick told the Telegraph that a new report is due to be published this autumn.

The recent rise of cabotage laws

In the meantime, however, there is evidence to suggest that cabotage protection is continuing to increase around the world. In its 2022 review of maritime trade, the UN Conference on Trade and Development (UNCTAD) noted that 'overdependence for shipping and associated services on foreign-owned, foreign seafarers or foreign flags can be a source of vulnerability. To build resilience, some countries are aiming to enhance the contributions of local or regional operators'.

It cited such examples as Western Australia, which established a task force to strengthen supply chains and reduce freight rates through such measures as developing a coastal fleet of tankers, general cargo ships and ro-ros, as well as action to upgrade the skills of the maritime workforce and support the local shipbuilding industry.

The benefits of backing domestic shipping

UNCTAD also noted that the Bangladesh fleet had grown by some 36% after the country introduced legislation in 2019 requiring 50% of cargoes to be carried by local vessels. Vietnam, Kenya and Tanzania have also introduced measures seeking to build national fleets and maritime infrastructure, it added.

The International Transport Workers' Federation (ITF) has also highlighted recent action being taken by maritime nations including Brazil, Canada, New Zealand, Norway, Panama, South Africa, and the USA, to strengthen support for cabotage and defend their shipping services following the Covid pandemic. It commended countries such as South Africa and Thailand which are now seeking to develop national shipping lines to address supply chain vulnerabilities highlighted during the crisis.

It also praised US president Joe Biden for taking early action during his term of office to reiterate support for the 1920 Jones Act, which requires all ships in US cabotage trades to be built, owned, and flagged in the country and crewed by American seafarers.

In 2023, the ITF's Cabotage Task Force approved a report on the shipping industry's recovery from the pandemic which noted that countries which protected their national fleets and seafarer skills had been most successful in heading off pandemic-related problems. 'Countries are seeing that strengthening national fleets and domestic water transport services, including cabotage, has strong economic and strategic benefits that will put them in a better position to deal with future crises,' the report stated.

The threat from free trade agreements

The report also warned countries not to seek the relaxation of cabotage rules in free trade agreements (FTAs) or in World Trade Organization discussions. 'Liberalising cabotage through FTA negotiations would leave a nation entirely dependent on foreign carriers to move goods between their domestic markets,' it argued. 'This would significantly impede their capacity for self-regulation and make them subject to the highly volatile global shipping markets including rates and terms of service.'

Chile is one of the very few countries considering the dilution of cabotage laws. During its Congress in Santiago in December, the ITF backed local maritime unions in their campaign against government proposals to allow foreign operators to carry trade between domestic ports. Hector Azúa, president of Chile's Merchant Navy officers' union, said: 'As Chilean workers, we are against the erosion of national cabotage laws. There is a real risk that Chilean shipowners could reflag from national flags to flags of convenience, which would mean the loss of more than 30 years of collective bargaining and potential job losses.'

Reaffirming the ITF commitment to cabotage laws

ITF president Paddy Crumlin commented: 'The ITF and its affiliates have been campaigning globally to underline the importance of national cabotage laws and the value of having domestic jobs in national waters, as well as domestic employment conditions for international seafarers in cases where national seafarers are not available.

'Whether we are in Chile or Australia, we will prosecute the case for national seafarers working on their own coastlines, and we remain resolute in our commitment to the long-term viability of our domestic shipping industries, not just for the employment opportunities that they deliver the maritime workers of today but the vital social and economic importance of shipping and seafaring for our countries.'


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