Maritime cabotage is the sea transport of passengers and goods between two sea ports located in the same country. Coastal trade, particularly in archipelagic countries and countries with long coast lines are an important and lucrative trade. It is therefore unsurprising that countries try to restrict the commercial transportation of goods and services between their ports and islands to nationally owned vessels.

Although the protection of cabotage trade remains a high priority for most countries, not all countries are able to develop sufficient shipping capacity to service their coastal shipping trades. It is also recognised that improved marine transport connectivity, particularly in containerised liner shipping, increases competition which can lead to reductions in trade cost and growth in trade volumes.

Most countries have therefore relaxed restrictions in their cabotage regimes by entering into trade agreements with other countries incorporating exceptions and waivers into their regimes for foreign flagged vessels to participate in their cabotage trades. For example, there are special regulations on domestic transport for services across the Taiwan Strait, between mainland China and Hong Kong or Macau.

The UK P&I Club say: "Though they have been softened in recent times, regulations governing cabotage regimes can vary greatly from region to region and it is important for shipowners to be informed. Those who fail to comply with cabotage regulations can receive heavy fines, have their vessel refused entry to port, and in severe cases, have their international liner operation license cancelled, making this legal briefing a valuable document for all shipowners and operators."

For more information on maritime cabotage regimes and an overview of the laws and regulations read the UK P&I Club legal briefing here:

Roland Cross / Alastair Doyle

Four Broadgate

UKP&I@fourbroadgate.com

+44 (0) 20 3697 4200

The UK P&I Club is a leading provider of P&I insurance and other services to the international shipping community. Established in 1869 the UK P&I Club insures over 240 million tonnes of owned and chartered shipping through its international offices and claims network. 'A (Stable)' rated by Standard & Poor's with free reserves of $540m, the UK P&I Club is renowned for its specialist skills and expertise which ensure 'best in class' underwriting, claims handling and loss prevention services.

The UK P&I Club is managed by Thomas Miller, an independent and international insurance, professional and investment services provider.

Thomas Miller is an independent and international provider of insurance, professional and investment services.

Founded in 1885, Thomas Miller's origins are in the provision of management services to mutual organisations, particularly in the international transport and professional indemnity sectors; where today they manage a large percentage of the foremost insurance mutuals. Thomas Miller also manages insurance facilities for all the self-employed barristers in England & Wales, as well as trustees of pension schemes, patent agents and housing associations.

Principal activities include:

• Management services for transport and professional indemnity insurance mutuals
• Investment management for institutions and private clients
• Professional services including legal services, claims and captive management
• Managing General Agency