Low water levels on the River Rhine have started to cause significant logistical issues, with little relief in sight as hot, dry weather throughout northern Europe is expected to continue. Industries from chemicals to metallurgy and manufacturing rely on barge transportation through the River Rhine to transport goods between Europe’s container gateways like Rotterdam and Antwerp and across inland river ports in Germany, France, and Switzerland. While shallow water is unlikely to completely halt shipping traffic, supply chains increasingly have to cope with limited loading capacity, longer transit times and higher freight costs.
Since July 30, water levels on the Rhine have fallen below 85 cm at the critical water gauge in Kaub near Coblence, limiting barge capacities to 50 percent or less of their maximum loading capacity. Ships usually carrying 3,000 tons are now loaded with maximum 1,500 tons of cargo. Due to the shallow water, barge operators now need a larger number of vessels to transport the same amount of cargo, usually imposing low water surcharges to customers. Steel manufacturer ThyssenKrupp, for instance, has reportedly been affected as the company uses barge transportation to supply its largest steel mill in Europe with raw materials such as coal and ore. In some cases, shipping rates on certain sections have doubled in the past few weeks. High temperatures forecast for this week may cause water levels to further descend below 80 cm from August 2, effectively halting the obligation of barge carriers like Contargo GmbH to transport goods on the Rhine River.
Reports have emerged that some cargo, especially in the petrochemical industry which largely relies on river transportation, is increasingly being transferred from barges to trains and trucks due to the rising freight rates. However, a shortage of truck drivers in Europe will likely further increase transportation costs for cargo from and to northern European ports. In light of the ongoing dry and hot weather, customers should secure additional capacity for rail and road transportation if possible. Regardless of the mode of transportation, customers should anticipate longer transit times and higher transportation costs until water levels on the Rhine River rise again.