Author Name: Tiffany Lee – Marketing Analyst at FreightAmigo｜23/8/2022
Extreme weather has wreaked havoc in recent weeks, with lengthy heat waves causing droughts across Europe. The ongoing drought in Germany has caused the water levels of the Rhine River to continue to fall, which has a considerable impact on the shipping industry.
The Rhine River, Europe’s most important river, plays a key role in helping shipping industry. Flowing from the Swiss Alps to the North Sea via German industrial heartlands, the Rhine is a major route for products ranging from grains to chemicals and coal. The river transport of raw materials has been very challenging. A major German Rhineland refinery said it had to cut output due to the low Rhine water levels, and the situation regarding energy supply therefore is tight.
Germany’s Transport Ministry predict that water levels at Kaub, located roughly mid-way along the Rhine between Koblenz and Mainz, will fall below 40cm and even lower. Some container ships had to reduce their normal load capacity by 25% to 35% to avoid running aground. The low water levels forced some container ships, especially vessels transporting coal and fuel, to halt operating. The government predicts that the problem of low water levels would not be solved shortly. Companies need to seek alternatives, like rail transport for the freight they send up and down the enormous waterway.
Stefan Schneider, an Economist at Deutsche Bank, expects the German economy will fall into a mild recession from the third quarter and that overall growth in 2022 would be 1.2%. If water levels continue to drop, growth could also drop just below 1%.
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