The Swedish Club has warned that southern passages around South America should remain a third-choice option for shipowners trading between the US East Coast and Asia, rather than a routine alternative to the Panama Canal.

In a new Member Alert, the Club says current Panama restrictions remain manageable for most trades and do not, on their own, justify a southern diversion. It is concerned, however, that Houthi developments around Mocha could make the Suez alternative harder to use, leaving owners considering southern routes sooner than expected.

Vessels using the Drake Passage can encounter severe weather, with a risk of cargo shift and prolonged strain on machinery. The Strait of Magellan offers a more sheltered passage but involves narrow channels, strong currents and reliance on local navigational knowledge. Suitable salvage assistance for a large vessel may not be readily available following a casualty along the southern Chilean coast. Preparation for cold-weather operations must also address crew competence, procedures and available resources. Owners should ensure crews have the training and support to manage bunker heating, fuel handling and machinery operation in the expected conditions.

Pilotage also requires attention. Although generally compulsory through the Strait of Magellan, an exemption applies to part of the route for qualifying ocean-to-ocean transits. Responsibility for voluntary pilotage costs depends on the charterparty wording. The Club stresses that a charterer’s routeing instructions cannot override the master’s responsibility for safety. Decisions should be documented at the time, supported by weather forecasts, routeing advice and voyage records.

Tore Forsmo, Senior Advisor Corporate Affairs at The Swedish Club, said: “For voyages from the US East Coast to Asia, Panama is Plan A. The route through the Mediterranean, Suez and Bab el-Mandeb would normally come next, provided the security situation allows. The southern passages are Plan C. For a transit through Magellan, taking a pilot may be the sensible choice even where it is not compulsory, but owners should not assume the charterer will pay. That needs to be agreed before the vessel gets there.”

Caroline Pennings, Chief Communications and Sustainability Officer at The Swedish Club, added: “Geopolitical volatility, more frequent extreme weather events and the erosion of respect for UNCLOS are putting established shipping routes under increasing pressure. The risk is that disruption becomes business as usual rather than a series of isolated incidents. Shipping has always adapted to changing conditions, and it will adapt to this too. But as the operating environment becomes more complex and less predictable, careful route planning, risk assessment and preparation will matter more than ever.”

Read the full Member Alert: Panama Canal Restrictions and the Real Cost of the Cape Horn Alternative

-ENDS-

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About The Swedish Club: The Swedish Club was founded by shipowners in 1872 and is today a leading and diversified mutual marine insurance company, owned and controlled by its members. The Club writes Protection & Indemnity, Freight, Demurrage & Defence, Hull & Machinery, Hull Interests, Loss of Hire, War Risks, and any additional insurances required by shipowners or charterers. It also writes Hull & Machinery, War Risks and Loss of Hire for Mobile Offshore Units and FPSOs.

Its head office is located in Gothenburg, Sweden, with branch offices in Athens, Oslo, London, Hong Kong and Singapore.
More information about The Swedish Club is available at: www.swedishclub.com

For further information please contact:
John Nixon- Tel: +44 (0)7852 168 088   Email: jnixon@elaboratecomms.com