Thyssenkrupp has suspended its own barge transport operations due to low water levels on the Rhine

A critical drop in water levels on the River Rhine has led to the complete suspension of Thyssenkrupp Steel’s own barge operations. The steelmaker has been forced to charter alternative third-party vessels with a shallower draught and to slightly reduce production volumes at its key plant in Duisburg due to significant constraints on the supply of raw materials. Current commitments to customers are currently being met in full, according to Reuters.

Analysts warn that record-low water levels on the Rhine — the main waterway for transporting fuel, raw materials and industrial goods — are rapidly driving up freight costs and threatening Germany’s fragile economic recovery. Due to the abnormal summer heatwave and lack of rainfall in Western Europe, large cargo ships are currently forced to sail with only 20 per cent of their capacity filled.

Mark Schattenberg, an economist at Deutsche Bank Research, notes that the first noticeable consequence of the crisis will be a sharp rise in transport costs and the forced re-routing of logistics routes. Although German industry showed the first signs of stabilisation in May, new infrastructure disruptions are creating a highly undesirable headwind for the industrial sector.

Germany’s Inland Waterways Authority forecasts that the water level at the critical bottleneck on the Rhine near the town of Kaub will fall below the 50-centimetre mark. Under such conditions, a typical container ship is capable of carrying less than one-fifth of its standard cargo. Schattenberg emphasises that if the water level at Kaub drops to 40 centimetres or below, cargo shipping on this stretch will be completely halted.

As reported by GMK Center, the shallowing of the Rhine is a seasonal, albeit relatively common, problem during the summer months, which hinders the transport of fuel, raw materials and industrial goods and rapidly increases the cost of freight transport.