Factbox – Why low water levels in the Rhine are hurting the German economy

BERLIN – Water levels on the Rhine are very low due to unusually hot and dry weather, preventing many ships from sailing fully loaded on the critical European sea route.

Here are some facts about why navigation on the Rhine is important for the economy:

WHY IS RHINERIVERDISPATCHIMPORTANT?

Flowing from the Swiss Alps to the North Sea via Germany’s industrial centres, the Rhine is a major route for products ranging from grain to chemicals and coal.

It is an important link between industrial producers and global export terminals in North Sea ports such as Rotterdam and Amsterdam, while canals and other rivers connect the Rhine to the Danube, which also allows to ship to the Black Sea.

WHATARRIVEDWHENTHE WATERLEVELSAREDOWN?

When water levels drop, freighters must sail with a reduced load to prevent them from running aground.

Some shippers have said in recent days that they are loading around a quarter of the regular volume of cargo onto ships.

This means more ships are needed to move shipments that would normally fit in a single ship, increasing freight costs. Shipping lines can usually pass the additional costs on to cargo owners, who in turn pass the higher costs on to customers.

WHAT IS THECRITICALTHE WATERLEVEL?

There is no specific water level at which navigation stops and authorities do not close the river. It is up to shipowners to decide whether they can operate safely.

The waterline baseline at the Kaub choke point near Koblenz was 32 centimeters on Monday, down from 42 centimeters on Friday and 51 centimeters a week ago. Vessels need approximately 1.5 meters of Kaub reference waterline to sail fully loaded.

WHAT IS THEIMPACT ON GERMANY‘S ECONOMY?

Shipping bottlenecks are another drag on Germany’s economy, which is already struggling with high inflation, supply chain disruptions and soaring gas prices after the invasion. Ukraine by Russia in February.

Economists estimate that disruption to shipping on the Rhine could slash overall economic growth by up to half a percentage point this year in Europe’s largest economy.

Low water levels in the Rhine are expected to increase costs for chemical companies such as BASF and could lead to production cuts.

Coal-fired power stations – back in vogue as an alternative to Russian gas supplies – are also facing supply shortages with ships unable to take on enough coal. Utility Uniper has warned of production cuts at two of its plants which account for 4% of Germany’s coal-fired power capacity.

WHAT IS BEINGFINISHED To TO RELIEVETHESITUATION?

Companies are shipping more goods by truck or train to make up the shortfall on the Rhine.

Germany plans to prioritize the transport of materials and equipment essential for energy production on the country’s rail networks in the event of a drop in the water level of the Rhine, a draft decree indicates on Sunday.

Shipbuilders also worked on ship designs capable of dealing with lower water levels.

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