Swedish Club Warns Cape Horn Is No Simple Panama Canal Alternative

Swedish Club Warns Cape Horn Is No Simple Panama Canal Alternative

A tightening Panama Canal is once again forcing shipowners to weigh longer routes around South America, but the Swedish Club is warning that Cape Horn and the Strait of Magellan are far from straightforward substitutes. In a new member alert, the marine insurer said worsening water conditions at the Panama Canal are coinciding with security disruptions around the Suez Canal, Red Sea and Strait of Hormuz, leaving owners with fewer attractive routing options. The latest Panama restrictions are being driven by a strengthening El Niño and a growing water deficit across the canal watershed. Rainfall from May through August has been running about 34% below historical averages, while inflows have been roughly 44% below normal, according to the Club. The Panama Canal Authority has progressively reduced the maximum allowable Neopanamax draft to 48 feet of Tropical Fresh Water and cut the number of available transit slots as it moves to conserve water. The ACP earlier planned to lower the Neopanamax draft further to 47.5 feet on October 1, but postponed that cut this month after reviewing Gatun Lake levels and weather forecas...