New EU Cabotage Rules
18th September, 2010
From 14 May 2010, new EU rules on cabotage came into force, restricting hauliers to a maximum of three cabotage operations within the seven day period following the delivery of an international load. VOSA now include cabotage as a matter of routine in all roadside checks of foreign vehicles and drivers found to be in breach of the new EU rules on cabotage will be issued with a fixed penalty of £200 at the roadside and ordered to proceed directly to their country of origin.
“Cabotage” is the right for an operator based in one EU Member State to operate domestic road haulage services within another EU Member State on a “temporary basis”. It permits that operator to enter a Member State on an international journey, deliver goods and pick up further goods for journeys within that Member State, before departure from that Member State; however, such journeys must be temporary, non-permanent and irregular.
Where road haulage operations in the UK are not irregular and are not being conducted on a non-temporary basis, they fall outside the scope of the Community Authorisation for cabotage and the operator must hold a UK Operator’s Licence, without which the operator’s vehicles can be impounded.
In the leading Court of Appeal case of Romantiek Transport BVBA v Vehicle and Operator Services Agency four related haulage firms (“the Companies”) were found to be involved in illegal cabotage operations in order to try to avoid the UK’s operator licensing regime. The Transport Tribunal’s decision to impound the Companies’ vehicles and trailers was upheld by the Court of Appeal.
The Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”) provides that: “no person shall use a goods vehicle on a road for the carriage of goods for hire or reward or for, or in connection with, any trade or business carried on by him except under an operator’s licence”.
Members of the Banham family were originally licensed to operate their own and the Companies’ vehicles in the UK; however, that operator’s licence was revoked in 2000 for numerous incidents of non-compliance with the requirements of the regulations relating to overloading of vehicles, the condition of vehicles, relevant rest periods for drivers and the need to keep proper tachograph records. The Banham family responded by setting up the Companies in Belgium and obtaining a Community Authorisation from the Belgium authorities to carry on cabotage.
In this case, VOSA submitted that the intensity of the domestic haulage work undertaken was such that there would have been insufficient time in the intervening period for international journeys to be undertaken; a vital requirement if the work was to qualify as cabotage. The Companies’ vehicles were, in fact, used entirely (or almost entirely) in the UK and so were never performing cabotage at all. As a result of this, VOSA seized and impounded a number of vehicles owned by the Banham family and the Companies.
Following the seizure and impounding of their vehicles, the Companies applied to the Senior Traffic Commissioner, Philip Brown, for the release of their vehicles on the grounds that they and their vehicles were permitted to carry out cabotage and therefore they did not need UK operator’s licences under the Act. The Traffic Commissioner held a Public Inquiry and refused the application, as did the Transport Tribunal on appeal, and then the Court of Appeal on second appeal.
The Transport Tribunal concluded that “…there is no doubt in the Tribunal’s mind that the Belgium companies were a device in order to enable Gary Banham to continue operating vehicles in the UK once he had been disqualified from holding an operator’s licence in this country.” The Court of Appeal agreed.
Cabotage is already regarded as an existing threat to UK haulage businesses; non UK operators can enter the UK having fuelled abroad at considerably lower cost, they are not necessarily subject to the same expensive compliance regimes as UK operators, and they also may not have to pay the same high level of wages to their employees. This makes non-UK hauliers able to carry goods at a considerably lower price to their customers than UK hauliers can. Also, foreign operators pay no road tax in the UK and do not contribute in any way to road usage.
Of course, cabotage can be used by UK based operators wishing to carry out journeys outside the UK but the most recently published statistics show a further increase in non-UK operators carrying out journeys within the UK, rather than vice versa.
From 14 May 2010, new EU rules on cabotage came into force (Regulation (EC) No 1072/2009) (“the Regulations”).
Article 8 of the Regulations provides that hauliers who are the holders of a Community Authorisation are now only permitted to carry out temporary cabotage operations within the 7 day period following the delivery of an international load from their home Member State to the host Member State (i.e. the country in which the cabotage operations are to be carried out). This 7 day period begins on the day of the last unloading of the incoming international carriage.
In the Member State where the incoming international delivery is made (the host Member State), hauliers are now only able to carry out up to 3 cabotage operations in the 7 day period, “with the same vehicle or, in the case of a coupled combination, the motor vehicle of that same vehicle”; the last unloading in the host Member State must take place within this 7 day period.
The Regulations define “cabotage operations” in this context as “national carriage for hire or reward carried out on a temporary basis in a host Member State in conformity with this Regulation” and both VOSA’s Traffic Enforcement Policy Manager and the DfT have confirmed that a multi-drop load in the UK will be viewed by the enforcement authorities as a single “cabotage operation”. Hauliers carrying out cabotage operations in the UK are therefore able to carry out up to 3 multi-drop journeys within the UK in the 7 day period following the delivery of an international load in the UK; however, both multiple collections and deliveries are not permitted on the same journey. The position is the same for cabotage operations carried out in Denmark and multiple collections and deliveries are permitted in Germany, Belgium and the Netherlands; however, it should be noted that, in France, only a single collection and delivery are permitted per national journey.
Article 8(2) of the Regulations also allows hauliers entering a Member State unladen en route to another Member State or a third (non-EU) country to carry out one cabotage operation in that country within 3 days of entry into that country providing that cabotage operation is carried out within the original period of 7 days following the delivery of an international load in a Member State. So, for example, a French haulier delivering a load from France in Germany and travelling back to France unladen could carry out one cabotage operation in Belgium on its way back to France within 3 days of entering Belgium, providing this cabotage operation was carried out within 7 days of the original unloading in Germany. Further, the cabotage operation carried out in Belgium could be a multi-drop journey.
To undertake cabotage operations, the onus is on the haulier to produce clear evidence of the incoming international carriage and of each consecutive cabotage operation carried out. Drivers should therefore carry documents showing the following:-
For advice and assistance in relation to any aspect of road transport law, contact Tim Culpin on 01244 405533 or email him at [email protected].
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