German industry adapts as Rhine river levels drop

German industry adapts as Rhine river levels drop

Navigating Low Water Levels on the Rhine: Challenges and Innovations in German Industry

Frankfurt/London, July 26 – German industry is facing major challenges in transporting goods due to increasingly frequent low water levels on the Rhine River. This historic river, spanning 1,230 km (764.29 miles) and serving as the commercial artery for 80% of Germany’s inland shipping, is vital for the country’s economy. However, extended periods of low water in recent years have hindered cargo vessels, impacting industries from coal to chemicals.

Low water levels on the Rhine have been a growing concern, with severe heatwaves gripping southern Europe exacerbating the issue. In 2018 and 2022, these low water levels caused disruptions, and the trend is expected to continue. Last year, Germany’s waterways transported 182 million metric tonnes of goods, a 6.4% decrease from the previous year and the lowest since German reunification¹. As the situation worsens, companies are finding innovative solutions to navigate these challenges and ensure the smooth flow of goods.

German chemical-maker Covestro, relying on the Rhine for transportation of over 30% of its finished goods and raw materials, recognizes the impact of climate change and low water levels on its operations. In response, Covestro has chartered two low-water barges to ensure a consistent supply of hydrochloric acid, even during times when Rhine levels are as low as 0.40 meters in Cologne². Similarly, BASF, which depends on the Rhine for around 40% of its raw materials, has also adopted low-water ships to maintain its supply chain³. These efforts highlight the critical nature of the river for transporting inflammable and toxic chemicals, where alternatives are limited.

The Kaub bottleneck is a crucial location where the low water levels have a significant impact. Traditional barges must reduce their cargo by more than half when water levels fall below a meter⁴. In contrast, BASF’s new low-water tanker, the Stolt Ludwigshafen, can carry a substantial 2,300 tonnes and sail through the Kaub bottleneck even at ultra-low levels of 30 centimeters (11.8 inches)⁵. This innovative solution ensures sufficient cargo capacity, allowing for uninterrupted operations.

Another major player affected by low water levels on the Rhine is Thyssenkrupp, a steel manufacturer. During the 2018 dry spell, they declared force majeure due to insufficient raw materials. To address this issue, Thyssenkrupp has chartered a long-term train capable of supplying approximately 3,000 metric tonnes of coal, essential for steel production, every day⁶. Such alternative solutions help industries mitigate the impact of low water levels and maintain their production levels.

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The Artery of the Economy

The repercussions of low water levels on the Rhine extend beyond individual companies and industries. In 2018, Germany’s gross domestic product (GDP) shrank by 0.4% due to reduced Rhine traffic, underlining the river’s significance as a crucial economic contributor⁷. The Kiel Institute for the World Economy estimates that if water levels at Kaub fall below 78 centimeters for 30 consecutive days, industrial production in Germany can decrease by 1%⁸. Moreover, Deutsche Bank predicts a decrease of 0.3% in Germany’s overall economic growth for 2023 and warns that extended low water levels could further delay the country’s recovery from recession⁹. While the impact of low water levels may be more manageable due to decreased demand in line with lower economic activity, it remains a significant concern for the nation’s economy¹⁰.

Winners and Losers

While the challenges posed by low water levels are evident, there are also opportunities emerging for certain sectors. Logistics companies are witnessing rising demand for vessels adapted to navigate lower river levels. Stolt-Nielsen, a shipping logistics firm, anticipates more frequent extreme conditions on the Rhine due to climate change. Correspondingly, they have been in talks with customers situated on or close to the Rhine about low-water barges, as supply chain integrity becomes a concern¹¹. Other companies, like Germany’s HGK Shipping, are building low-water ships to cater to industries such as energy, chemicals, and steel, which rely heavily on the Rhine for transporting large volumes of raw materials¹².

Furthermore, companies like Evonik, an industrial corporation, emphasize that Germany’s railway system requires extensive upgrading to provide a viable alternative to the Rhine¹³. As a leading industrial nation, Germany cannot afford to rely on a second-class railway network. Therefore, adapting to low water levels on the Rhine continues to be a priority for many industries, leading to investments in alternative transportation and logistics solutions.

In conclusion, the challenges posed by low water levels on the Rhine are impacting German industries, disrupting the flow of goods and even the nation’s economy. However, inventive solutions such as chartering low-water barges, utilizing alternative transportation modes, and investing in innovative vessels catered to low water levels are helping companies navigate these obstacles. The ability to adapt and find effective strategies in the face of changing environmental conditions is critical for ensuring the resilience of businesses reliant on the Rhine and sustaining the country’s economic growth.

Written with passion by a technology and media expert, providing rich and humorous insights into the challenges and innovations surrounding low water levels on the Rhine.

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