Low water levels on the Rhine River, a key European trade waterway, are severely disrupting shipping and forcing German industries to cut production. Water levels at Kaub, a crucial choke point, have dropped to 30 centimeters (12 inches) and are forecast to fall further to around 25 centimeters, approaching the record low of 25 centimeters set in 2018. This prolonged disruption, which has seen consistently low water levels since late May, is particularly impacting the transport of commodities like grain, minerals, ores, coal, and petroleum products. Some vessels are operating at only 15% to 20% of their maximum load, requiring four to five ships to transport the volume normally carried by one, and increasing transport costs significantly.
Major German companies are feeling the effects. BASF has warned of potential shortages or force majeure declarations at its Ludwigshafen chemical complex, despite being better prepared than in 2018 when low Rhine levels cost the company approximately €250 million in operating profit. Thyssenkrupp has reduced hot-metal production at its Duisburg operation due to delays in raw material deliveries, and its own barges have been taken out of service, necessitating the chartering of shallower-draft vessels. LyondellBasell also declared force majeure on butadiene supplies from its Wesseling plant due to feedstock delivery disruptions.
Economists are concerned about the wider economic impact. Analysts from Deutsche Bank Research and the Kiel Institute for the World Economy, including Stefan Kooths, estimate that the disruption could shave as much as 0.2 percentage points off Germany's economic output in the third quarter. This comes as Germany's railway line on the eastern bank of the Rhine is closed for freight traffic until December 12, limiting a crucial alternative transport route. The reduced industrial activity could push Europe's largest economy towards stagnation, as many economists already expect modest growth of no more than 0.2% for the summer months. The cost of tanker barge transport from Rotterdam to Karlsruhe has surged to approximately €145-€150 per tonne from about €45 at the end of June.
