Why was the trip around south america impractical as a trade route?

The reason it is impractical is they traders had to go around South America... For example, say New York is sending trade ships to San Francisco. They would go all the way down to the bottom of South America and then all they way back up. By creating the panama canal, it allowed ships to cut through the land and make the route more practical. 

Every statement this is because of the same law