Falling water levels on Germany's Rhine River are increasing freight costs and disrupting logistics, adding pressure to the country's industrial sector, while local steelmaker Thyssenkrupp Steel has slightly reduced blast furnace production because of constrained raw material supplies, according to a report by Reuters.
Thyssenkrupp Steel adjusts production
Thyssenkrupp Steel told Reuters that worsening low water levels on the Rhine are affecting the supply of raw materials to its Duisburg steelworks.
According to the company, it has slightly reduced blast furnace production due to the restricted inflow of raw materials. It also suspended its own barge operations and is instead chartering vessels with a shallower draught to continue deliveries. The company added that supplies to customers are not currently at risk.
Freight costs rise as vessels reduce cargo loads
The Rhine is one of Germany's most important transport routes for raw materials, fuel products and manufactured goods.
A heatwave and limited rainfall across western Europe have caused water levels to fall sharply, forcing cargo vessels to operate at significantly reduced loading capacity. At current levels, a typical Rhine container vessel can navigate the Kaub bottleneck carrying less than 20 percent of its normal cargo. Ship operators have responded by imposing shallow-water surcharges, increasing transport costs for cargo owners.
Risk of further disruption
Germany's inland waterways agency expects the water level at Kaub, a key shipping bottleneck on the Rhine, to fall below 50 centimeters. According to Deutsche Bank Research, cargo shipping is usually suspended if the water level drops to around 40 centimeters or lower.
