A blockade is a cordon of ships that prevents any trade going through a port whilst it is in place and any fleet moored there from escaping without fighting a battle. It can be broken by a naval attack on the blockading fleet. You can blockade a port by right-clicking on it as you would another fleet, with your own fleet selected. If there is an enemy fleet moored there, a cordon graphic will appear to indicate a blockade is under way. Otherwise, your fleet will row straight into the port and occupy it.