The Swedish Club warns Cape Horn should remain ‘Plan C’ for Panama diversions

The Swedish Club has cautioned that southern routes around South America should remain a fallback option for shipping companies transporting goods between the US East Coast and Asia. In a recent advisory, the club suggests that current Panama Canal restrictions are manageable and do not necessitate a shift towards using the southern passages as a primary alternative.

However, the club expresses concern that recent developments involving Houthi forces near Mocha could make the Suez Canal a more challenging option, potentially prompting shippers to consider southern routes sooner than anticipated.

Vessels navigating the Drake Passage may face severe weather conditions, which can lead to cargo shifting and increased strain on the ship's machinery. The Strait of Magellan provides a more sheltered passage, but it entails narrow channels, strong currents, and a reliance on local navigational expertise. In the event of a major incident, obtaining salvage assistance near the southern Chilean coast may prove difficult.

Additionally, preparations for operations in cold weather must take into account crew qualifications, procedures, and available resources.

To ensure safe passage, owners must make certain that their crews are adequately trained and equipped to handle the specific challenges posed by these routes. This includes addressing concerns such as bunker heating, fuel management, and machinery operation in demanding environmental conditions. The club also emphasizes the importance of pilotage, which is generally compulsory through the Strait of Magellan but offers an exemption for certain ocean-to-ocean voyages.

The responsibility for paying pilotage fees depends on the specific terms of the charterparty agreement.

The Swedish Club stresses that a ship's master retains the primary responsibility for ensuring the safety of the vessel and its crew. Any decisions regarding route selection should be documented at the time of the voyage, supported by up-to-date weather forecasts, route recommendations, and detailed voyage records. Tore Forsmo, the club's Senior Advisor for Corporate Affairs, advises that while Panama remains the preferred route (Plan A) for many shipowners, the southern passages (Plan C) should not be dismissed outright.

For those considering a transit through the Strait of Magellan, the club recommends obtaining pilotage services even if they are not legally required, as this may prove to be a prudent decision. However, owners should be aware that the charterer may not be willing to cover these additional costs, and this must be clarified prior to the voyage's commencement.

Caroline Pennings, the club's Chief Communications and Sustainability Officer, points out that geopolitical instability, more frequent extreme weather events, and a growing lack of respect for international maritime law (UNCLOS) are putting traditional shipping routes under increasing pressure. As a result, disruptions may become the norm rather than isolated incidents.

The club emphasizes that the shipping industry has historically adapted to changing conditions, but the complexity and unpredictability of the modern operating environment necessitate meticulous route planning, comprehensive risk assessments, and thorough preparation. The club concludes that careful route planning will become increasingly crucial as the shipping landscape evolves.