Rhine River at Risk of Shipping Disruption Due to Low Water Levels

Rhine River at Risk of Shipping Disruption Due to Low Water Levels

Since mid-April, water levels of the Rhine River, Europe’s most important waterway, have begun to drop to critical levels. This could disrupt shipping operations, in particular on the stretch from Koblenz to Rotterdam. 

As of May 3, water levels at Kaub, one of the Rhine’s narrowest points south of Cologne, remained around 135 cm, a level that typically forces shipping lines to impose low-water surcharges on shipments. This increases costs for river-dependent industries such as chemicals, metallurgy, and energy that move raw materials between terminals and suppliers from the Netherlands all the way to Switzerland. 

Low-water surcharges apply at critical water levels

Fluctuating water levels pose a threat to barge operators and manufacturers relying on river shipping as they can reduce the transportation capacity of ships, which requires companies to organize more costly alternative modes of transportation, such as road and rail, for large volumes of cargo. When water levels on the Rhine River fall below 135 cm, ships are only able to load as much as 50 percent of their usual capacity to avoid running aground.

Figure 01: Rhine River water levels for the month of April 2021; Source: Everstream Analytics

Due to the falling levels, Hapag-Lloyd announced on April 26 that it would impose low-water surcharges for both import and export shipments with immediate effect. The additional charges are calculated depending on the water level; when water levels stand between 131-150 cm, surcharges of EUR 30 for a 20-feet container and EUR 40 for a 40-feet container apply, while shipping can no longer be guaranteed if water levels at Kaub fall below 81 cm. 

Water levels at Kaub

Centimeter20-foot container40-foot container
150 – 131EUR 30EUR 40
130 – 111EUR 45EUR 60
110 – 101EUR 60EUR 75
100 – 91EUR 75EUR 100
90 – 81EUR 100EUR 135
Figure 02: Revised inland tariff; Source: Hapag-Lloyd

High water levels also pose challenges for shippers

While water levels have reached dangerously low levels in recent weeks, the opposite threat of high water levels caused shipping traffic to be halted for several days just two months earlier in January and February 2021, highlighting the volatility of water throughput on the Rhine and the increasing risk of disruption for shippers.  

In February, the banks of the Rhine River began to burst due to increased rainfall and snowmelt in the Alps, with water levels rising above Flood Stage 2, causing river shipping to be suspended at several sections between Karlsruhe and Koblenz. 

Between November 2020 and February 2021, water levels had already experienced extreme volatility, with low levels threatening to disrupt shipping at the beginning of December 2020 and in mid-January 2021, before rapidly rising to surpass Flood Stage 1 in early February and then Flood Stage 2 in mid-February. 

In recent years, logistics and manufacturing operations relying on the Rhine River have increasingly faced shipping capacity reductions that disrupted both inbound raw material and outbound product delivery flows for companies located along the river. As recently as 2018, water levels dropped to a record low of 25 cm, suspending shipping operations and forcing steel and chemical companies including Solvay, BASF, Ineos, and Arcelor Mittal to declare force majeure — a clause that allows companies to not fulfill their contractual obligations due to an event beyond their control — for an average of 2 ½ months. This subsequently caused ripple effects through downstream manufacturing supply chains relying on chemical and steel products, causing capacity crunches and raising costs for a variety of raw materials and products.  

A recurring challenge

While water levels on the Rhine River are expected to surpass 150 cm over the next few days, likely normalizing shipping operations until at least mid-May, water fluctuations at Europe’s most critical waterway has become a recurring challenge for those relying on river transportation for raw materials or final products. This challenge is mainly fueled by increasingly unpredictable weather patterns that include prolonged periods of heavy rainfall, dry conditions leading to drought as well as the continuous melting of glaciers in the Alps that feed into the river.  

With water level changes becoming more frequent, companies are advised to constantly monitor critical water gauges along the Rhine River to anticipate any disruptive trends. To enhance water level forecasts, the German Administration for Waterways (WSV) recently launched a 10-day forecast for gauges along the Rhine River, which was previously limited to four days.

In the long term, organizations should consider increasing storage capacity for critical raw materials on site and/or secure space on alternative modes of transportation such as trucking, rail, or modified ships. Chemical producer BASF SE, for instance, has increased its use of special barges which can continue to navigate even during periods of very low water on the Rhine River. Such measures can help mitigate the effects of fluctuating water levels. 

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