Low water on Rhine cuts German barge capacity

Low water on Rhine cuts German barge capacity

A barge travels at the Port of Antwerp

The Rhine River is now lower than the previous record levels set in 2003 as the dry spell that began in August has extended through October, and barges cannot travel past Ludwigshafen, south of Frankfurt. (Above: A barge travels at the port of Antwerp.) Photo credit: Shutterstock.com.

Record-low water levels in the Rhine River are making it increasingly difficult for shippers to transport their cargo on inland waterways through Germany, and an already tight European trucking market is struggling to handle a huge spike in demand.

The Rhine River is now lower than the previous record levels set in 2003 as the dry spell that began in August has extended through October, and barges cannot travel past Ludwigshafen, south of Frankfurt. There is little expectation that river levels will rise before heavier rains that are predicted for mid-November.

Fortunately, the Asia-Europe trade is in its slow season, but roughly 25 percent of containers entering Europe’s two busiest gateways of ports of Rotterdam and Antwerp are shipped along the inland waterways.

The supply chain director for a German importer using the ports of Rotterdam and Antwerp said the low water was a serious concern for his company. “We only go as far as Duisburg and luckily we can still manage, but I don’t know for how long,” he told JOC.com.

Barge operators adjust

Barge operators have been forced to dramatically reduce capacity on the vessels or cancel services to certain areas. Water levels, the degree of loading of barges, and freight rates are closely linked, and when water levels fall below a certain threshold, the cost of transport rises and freight rates increase more strongly. This is subsequently putting pressure on road freight that has been short of capacity all year.

Atlantic Container Line (ACL) said in a customer advisory that the low water meant the intermodal provider would not have the ability to offer barge-truck moves, even as shipper requests for truck transport has quadrupled for the next few weeks.

“All one-way truckers are fully booked for the next couple of weeks as this is a general issue in the market,” ACL said. The advisory noted that, “guaranteeing carrier haulage delivery and pick-ups on a timely basis as part of a through rate is extremely difficult.

“Accordingly, please note ACL cannot be held responsible for any third party costs that may be associated with our inability to secure adequate truck power to deliver or collect shipments, or spot containers.”

These costs could include storage fees, additional warehouse labor, and demurrage.

Contargo has been charging a low-water surcharge on full containers in the summer as the European intermodal operator has been unable to fully load its barges because of the shallow draft. But last week, on Oct. 19, Contargo said its barges can no longer safely navigate the river and it has now discontinued barge activities on the Upper and Middle Rhine.

Capacity reduction

Hans Buitendijk, managing director of neska Container Line, told JOC.com that although his barge fleet was still operating, the low water has reduced his capacity by 20 percent.

“We have installed a shuttle service between Duisburg and Krefeld, and the Westports, where we try to make two round trips per week to make as much use of the fleet capacity as possible,” he said.

“Due to the low volume handled [in the slack season] this works for now, with varying success. Hopefully, the water levels do not drop any further, or even these kind of solutions will fail.”

But the limited operations downriver meant rail and truck capacity directly to and from the European gateway seaports was stretched to its limits, Buitendijk said.

Felix Heger, head of ocean freight Europe for DHL, said river levels were at all-time lows and barge operators were now at or below 30 percent of capacity with some services stopped entirely.

“Of course this is pushing the demand for rail and road haulage, and hence road haulage availability and rates,” he said.

While shippers battle to get their containers to and from inland European destinations, the impact of the low Rhine River is being felt as acutely by the chemicals industry.

An IHS Markit report said consumer supply has been complicated by the low Rhine water levels and manufacturers such as BASF and Solvay, being deepest inland, were not able to receive raw materials. Solvay has not taken delivery of raw material shipments by barge since Oct. 16 and BASF declared force majeure for some nylon products coming out of its Ludwigshafen plant.

Low water levels have led to more difficult supply lines into and out of a broad range of locations as barge loads were increasingly restricted during October with no significant improvement forecast. Heavier rains are only expected in mid-November.

“It would be dangerous to make assumptions about how Rhine water levels will progress in the next couple of weeks,” the IHS Markit chemicals report concluded, adding that for some chemical producers the impact “cannot get much worse.”

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.