Record low water levels on the Rhine River, a major thoroughfare for Europe’s chemical industry, are disrupting chemical supply chains for the second time in 8 years.
Water levels at Kaub, Germany, a shipping choke point between Ludwigshafen and Cologne, dipped to 20 cm on Aug. 5, according to the Federal Institute of Hydrology (BfG)—5 cm below the previous record in 2018.
Persistent drought in western Europe means the record was broken much earlier in the year than during the 2018 crisis, when Rhine water levels reached their lowest in late October. With no significant rain in the forecast, the BfG expects levels to drop further and for restrictions on inland shipping to persist well into the autumn.
Chemicals make up 11% of commodity traffic on the Rhine. The river links the ports of Rotterdam, the Netherlands, and Antwerp, Belgium, with some of Europe’s largest chemical clusters, including the Lower Rhine region, as well as the Cologne chemical corridor and Ludwigshafen, Germany. Low water levels put a stop to large chemical barges, which require at least 40 cm of depth.
BASF, which operates a major plant in Ludwigshafen, has declared force majeure on various surfactants produced at its European sites due to a shortage of raw materials. But CEO Markus Kamieth told investors in a recent conference call that BASF is “much better prepared” than it was 8 years ago, when Rhine disruptions forced the company to shut its toluene diisocyanate plant in Ludwigshafen. The company is now deploying specialized low-water vessels and increasing its use of rail and road freight to keep raw materials and products moving.
Similarly, Evonik Industries is shifting freight to rail or road and sailing partially loaded ships while water levels still allow it. “Central locks are still in operation, and entry and exit into important canals is still possible,” a spokesperson says in an email, adding that Evonik’s sites in Germany are running as usual for now.
Ineos says it has been able to maintain capacity at its plant in Cologne by lining up alternative transport routes; it is supplying customers from other European facilities where necessary. “We have contingency plans in place should levels decrease further, but we are not at that stage today,” Ineos managing director and works manager Patrick Giefers says in an email.
Covestro has cut production at its sites in the Lower Rhine region as restricted barge traffic has constrained raw material supply. The company is chartering vessels with reduced loads and increasing sailing frequency to compensate for smaller loads per trip. “We also began building up raw material inventories several weeks ago as a precaution,” a spokesperson says in an email.
Reducing its dependence on the Rhine is not an option for Covestro. Over 30% of the firm’s finished materials and 75% of its raw materials in Europe move on the waterway, and a single barge with a capacity of 1,500 metric tons replaces around 60 trucks while being more environmentally friendly. The firm says it’s up to policymakers to find long-term solutions that will keep the river “a dependable lifeline for German industry even under the conditions of climate change.”
For the time being, the BfG is not expecting enough rain to ease the situation. Economists have warned that record-low Rhine water levels could undermine Germany’s nascent economic recovery. According to published reports, the Kiel Institute for the World Economy estimates that the disruption could shave 0.1–0.2% off the country’s third-quarter economic growth by increasing transport costs and constraining industrial supply chains.
