Low water levels on the Rhine disrupt logistics and raise costs, threatening Germany's fragile economic recovery, reports Baird Maritime.
Low water levels on Germany's Rhine river are disrupting logistics and raising transport costs, adding pressure to the country's fragile economic recovery, reports Melbourne's Baird Maritime.
The heatwave and reduced rainfall have sharply lowered water levels, forcing cargo ships to sail partly empty. Thyssenkrupp Steel stated that restricted supplies of raw materials have led to a slight reduction in blast furnace output at its Duisburg plant.
The company has suspended its own barge operations and is now chartering shallow-draught vessels. Operators are imposing surcharges to offset reduced loads, spreading cargo across several ships and increasing costs for owners.
Deutsche Bank Research economist Marc Schattenberg noted that higher transport costs and logistics adjustments will be felt across various industries. He warned that supply chain disruptions could hinder Germany's nascent industrial recovery, although firms are better prepared than in past crises.
Water levels at Kaub, a key Rhine bottleneck, were expected to fall below 50 centimetres, compared to a record low of 25 centimetres in October 2018. At current levels, a 500 TEU container ship can carry less than one-fifth of its normal load.
Analysts indicated that a closure of the Rhine could disrupt refined fuel logistics, necessitating up to 3,000 extra road tankers daily. The chemical industry is better prepared than in 2018, but officials warned that prolonged disruption could raise fuel prices and weigh on industrial output.
