Low water on Germany's Rhine river threatens new blow to economy
Dwindling water levels on some of Germany's major rivers, worsened by heat and drought, are raising fears that badly constrained riverboat cargo traffic may deal yet another blow to the struggling economy.
Michael Ebling, economy minister for Rhineland-Palatinate state, has called on the government to fast-track a project to deepen a key stretch of the Rhine in Germany, arguing that this strategic waterway must remain operational year-round. The river handles around 80 percent of Germany's inland waterway traffic, according to Rico Luman, an economist at ING. Every year, some 285 million tonnes of goods travel along the river which links many of Germany's biggest industrial hubs with the major Dutch port of Rotterdam. - Industry feeling the pinch -The port in Duisburg, in Germany's steel-producing Ruhr region, has reported that vessel loading capacities have dropped to about one-third of their usual levels. The lower loads have led to a 50 to 60 percent increase in the number of port calls in recent weeks, as well as a shift of cargo toward smaller vessels, rail and road transport. In the oil sector, loads are sometimes capped at between 300 and 400 tonnes for 110-meter tanker barges, leading to a surge in the number of trips required. That has driven up shipping rates, with prices hitting 200 euros ($230) per tonne this month for petroleum products shipped between the industrial city of Karlsruhe and the coastal ports of Amsterdam, Rotterdam and Antwerp. That easily broke the previous record of 130 euros per tonne set in August 2022, according to the Dutch firm Insights Global. For German industrial producers the blow comes at a difficult time, as many are already suffering from high energy costs, stiff global competition and US tariffs. Thyssenkrupp has turned to shallow-draft ships to keep the necessary raw materials and finished products moving on the river. So too has chemicals giant BASF, which operates a massive production complex upstream from Duisburg in Ludwigshafen. Speciality chemicals company Covestro said that shipping disruptions on the river are already affecting supply and production at certain cites. Covestro relies on the Rhine to ship more than 30 percent of its manufactured products and bring in nearly 75 percent of the needed raw materials. Another German chemicals firm, the Cologne-based Lanxess, described the situation as "very difficult" with barge deliveries severely restricted and some loading and unloading areas inaccessible. In the refining sector, Shell said it is making greater use of storage capacity and attempting to divert some shipments to rail, road, or pipelines. - In need of a rainmaker -Other modes of transport face higher costs and other constraints, making replacing the heavily loaded river barges a tough and expensive challenge. Germany faces a chronic shortage of truck drivers, and a fresh surge in fuel prices thanks to the ongoing Middle East war. The country's overloaded rail network, meanwhile, has long been the source of complaints for passengers.