Stolt-Nielsen has given up on the “unreliable” Panama Canal and is re-routing the world’s biggest fleet of chemical tankers on longer voyages.
The Norwegian group’s Stolt Tankers is sending its 166 vessels through the Suez Canal instead.
Stolt-Nielsen said in an email to Bloomberg that it is charging cargo owners extra for the journeys.
“Stolt Tankers has found that the service through the Panama Canal has become increasingly unreliable in recent months,” the company said.
“Our customers need reassurance that their cargo will arrive on time to avoid negatively impacting their supply chains; therefore we have been rerouting our ships via the Suez Canal.”
A severe drought means the Panama Canal Authority (ACP) has had to reduce the number of daily transits.
The waterway can usually handle 40 ships per day, but this has gradually fallen to 24 and will drop to 18 by February.
Stolt-Nielsen said other companies are taking a similar approach to deal with delays of up to 20 days this year.
Nearly all VLGCs have stopped calling at the canal, instead taking longer routes through Suez, around the Cape of Good Hope and the tip of South America.
The ACP has begun offering extra transit slot auctions for vessels trapped in queues at the waterway.
‘Special auctions’
These “special” auctions began on Saturday for a crossing on Monday.
Regular auctions of slots have gone for nearly $4m in recent weeks — a record level.
VLGC rates have hit record highs this year, partly due to the Panama delays.
Chemical tanker earnings have been strong, and should receive a boost from vessels being tied up on longer voyages.
Bond tapped
Meanwhile, Stolt-Nielsen said in a stock exchange filing that it successfully completed a NOK 325m ($30.4m) tap issue of its five-year bond due in 2028.
The total outstanding amount is now NOK 1.52bn.
The series carries a floating rate coupon of the three-month Norwegian interbank offered rate (Nibor) plus 3.15%.
The company has now swapped the tap amount into US dollars at a fixed interest rate of 7.805%.
The cash will go towards general corporate purposes.
DNB Markets acted as the sole arranger.
