Southern Routes to Asia: Why Cape Horn Is a Risky Last Resort
The Swedish Club warns that southern passages around South America should remain a third-choice option for US East.
The Swedish Club, a marine insurer based in Gothenburg, has urged shipowners to treat southern routes around South America as a last-resort option rather than a standard alternative to the Panama and Suez canals. In a recent Member Alert, the organization acknowledged that current restrictions at the Panama Canal remain workable for most commercial voyages but warned that escalating security threats near the Red Sea could soon force operators to reconsider their routing strategies.
The Drake Passage, known for its extreme weather, poses risks such as cargo shifts and prolonged strain on vessel machinery. While the Strait of Magellan offers a more protected passage, it introduces its own difficulties, including narrow channels, strong currents, and the need for specialized local navigational expertise. Salvage operations along the southern Chilean coast may also be limited, complicating emergency responses for large vessels.
Cold-weather preparedness is another critical concern. Crews must be trained to manage bunker heating, fuel handling, and machinery operation in sub-zero conditions. The Swedish Club emphasized that proper procedures and resources are essential to prevent operational failures in these harsh environments.
Southern Routes Present Unique Challenges
Pilotage requirements add further complexity. While generally mandatory in the Strait of Magellan, exemptions exist for certain ocean-to-ocean transits. However, the Club advised that even when pilotage is not compulsory, hiring a pilot may still be the safest choice. Owners should clarify cost responsibilities with charterers before arrival, as contractual terms may not automatically cover these expenses. The Club also stressed that charterers’ routing instructions cannot override a captain’s authority to prioritize safety.
Despite growing disruptions, the Panama Canal continues to be the most practical route for trade between the U.S. East Coast and Asia. Current restrictions, including a 48-foot draft limit for Neopanamax vessels and daily transit slots, are manageable for most operators.
The Panama Canal Authority had planned to reduce the draft limit to 47.5 feet in early October but postponed the decision after assessing water levels in Gatun Lake. Recent data showed rainfall from May to August was 34% below historical averages, while water inflows were 44% below normal, highlighting the canal’s vulnerability to climate fluctuations.
Panama and Suez Remain Preferred—For Now
The Suez route, traditionally the second choice, has become increasingly unreliable due to Houthi attacks in the Red Sea and broader instability in the Strait of Hormuz. The Swedish Club noted that southern passages are being considered not because they have improved but because the alternatives have grown riskier. Senior Advisor Tore Forsmo stated that while Panama remains “Plan A” and Suez “Plan B” (if security permits), the southern routes should only be “Plan C.”
“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.”
Tore Forsmo·Senior Advisor Corporate Affairs, The Swedish Club
Chief Communications and Sustainability Officer Caroline Pennings added that geopolitical instability, extreme weather, and diminishing respect for maritime laws are putting traditional shipping routes under unprecedented pressure. While the industry has always adapted to change, she warned that careful planning and risk assessment are now more critical than ever.
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