Where Did the Rhine Go? Drought-Hit Cargo River Sparks Economic Fears
WHY YOU SHOULD CARE
Water levels in the river are at their lowest since the 1920s, sparking worries about the economic impact.
By David Sheppard and Guy Chazan
Plummeting water levels in the drought-hit Rhine River are disrupting shipping and squeezing European supplies of important industrial commodities from coal to motor fuel.
Switzerland tapped its emergency stockpiles of diesel this week after some stretches of the river receded to knee-high levels and fuel barges could not reach the country. The shortage of deliveries sent prices at the pump soaring — a reaction more commonly associated with war in the Middle East than dry weather in Germany.
BASF, the German chemicals group, has had to curtail production at the world’s largest integrated chemicals facility at Ludwigshafen. It is warning of potential shortages of certain products, creating supply chain headaches for industries across the Continent. “With the current water level, only few barges can dock,” BASF said in a statement. “Even if some goods are transferred to alternative means of transport such as trucks or trains, the supply of some important raw materials will be restricted.”
The disruption highlights the role that the 745-mile-long river, a vital waterway for international trade since the days of the Holy Roman Empire, still plays in carrying seaborne goods through Germany’s industrial heartland.
We’re really hoping for a wet autumn.
Christoph Kösters, head of German transport association VWL
Water levels in the river are at their lowest since the 1920s after a prolonged drought, sparking concern from businesses and governments over the potential economic impact. It is also raising questions about how climate change will hit Europe’s transport infrastructure.
Christoph Kösters, head of the VWL, a German transport association, says the problems started with low levels of Alpine snowmelt this spring, followed by a dry summer. “We had the problem this year that there was relatively little melted snow and ice coming down into the Rhine,” Kösters says. “A lot of goods have been warehoused in anticipation of this problem. But the longer this situation persists, the bigger the risk of shortages. In a few weeks, it could get harder.”
In Cologne, the biggest city on the Rhine, the average water level is normally more than 9 feet but has fallen below 28 inches in parts. The lowest level in recorded history in 1929 was 24 inches, a level officials think could be surpassed soon if rains do not arrive. Ferry services have been halted at many points along the river.
S&P Global Platts, which provides oil and commodities coverage, says barges are struggling to enter the upper Rhine beyond Kaub, a major shipping chokepoint between Koblenz and Mainz. Traders have struggled to find alternative means of transport at short notice. “Though rail cars and trucks are often considered an alternative to barge shipments along the Rhine, possible capacities appear to have been reached,” S&P said in a statement.
The cost of available barges has risen from just $4–$5 per metric ton to more than $40 — a cost likely to be passed on to consumers.
The price of heating oil, which many German and Swiss homes rely on in the winter months, has jumped in areas serviced by the river. In Hamburg, 100 liters of the fuel costs approximately 76 euros, Klaus Bergmann of the Esyoil consultancy said last week, while in Stuttgart prices are closer to 100 euros.
While weather forecasts predict showers, many expect a prolonged deluge will be needed to make a significant difference. “We’re really hoping for a wet autumn,” says Kösters.
Additional reporting by Ralph Atkins in Vienna.
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