What is Cabotage?
Cabotage refers to the transportation of goods or passengers between two places in the same country by a transport operator from another country.
Cabotage law applies to merchant ships in most countries that have a coastline. It's a way for countries to protect their domestic shipping industries from foreign competition, preserve domestically owned shipping infrastructure, bolster national security, and ensure safety in territorial waters.
There are 91 countries around the world that have cabotage laws, therefore, understanding the concept this regulation is essential for vessel charterers, owners, and operators.
LNCM Law and Cabotage
While the United States has relied on the Jones Act since 1920 to define cabotage, Mexico's maritime sector is governed by Ley de Navegación y Comercio Marítimos (LNCM). In 2015 Mexico restructured this law to help stimulate the development of the energy sector. The regulations under LNCM law provide a clear process that allows temporary navigation permits for foreign flag vessels, allowing them to operate in cabotage trade in Mexico.
Article 40 of the LNCM law states that the operation and exploitation of vessels "in interior and coastal navigation is reserved to Mexican navigation companies with Mexican vessels," however, an exception is made when there is a lack of availability of Mexican operated and flagged vessels that meet the specifications required for the scope of work.
What Is the Mexican Navigation Permit Process Like?
When a foreign vessel applies for a navigation permit in Mexico, it can only be submitted by a Naviera Mexicana (Mexican Registered Ship Operator). During the permit application process, the Secretaria de Comunicaciones y Transportes (SCT) canvasses Mexican ship owners for the availability of a Mexican operated and flagged vessel which meets the specifications required for the scope of work. If there is not a suitable Mexican flagged or operated vessel, a navigation permit will be granted to a foreign vessel for a single three-month period.
The permit can be renewed in succession up to seven times. In some cases, once the maximum number of renewals is reached, the vessel must be flagged Mexican in order to continue operating in Mexican waters.
For highly specialized vessels, often including those dedicated to oil and gas activities, this restriction is waived, and the operator is able to continue applying for permits.
How Do I Apply for a Mexican Navigation Permit
In order to apply for a navigation permit in Mexico, you'll need to provide the following documents:
- Contract detailing Scope of work (in Spanish)
- Charter Party/Fleet Services Agreement with Mexican Operator
- International Tonnage Certificate
- International Ship Security Certificate
- Cargo Ship Construction Certificate
- Cargo Ship Safety Radio Certificate
- Safety Management Certificate
- Minimum Safe Manning Certificate
- International Load Line Certificate Class Certificate
- International Oil Pollution Prevention Certificate (IOPP)
- Supplement to the IOPP Certificate
- Document of Compliance
- Certificate of Entry (P&I)
- IMO Crewlist
- Name / Certificate of Mexican Ship Security Officer
Applications for permits may be submitted prior to vessels arriving in Mexico. The SCT takes 20-30 days to process any permit request. Gulf Marine Contractors (GMC) assists clients in obtaining a qualified Navigation Permits for vessels working in Mexican waters.
Contact Us at Gulf Marine Contractors (GMC) today for more information on the permit process.
Gulf Marine Contractors is a leading on-demand marine agency and logistics provider to the offshore energy industry. You can read more about us here.