LONDON (ICIS)--Shipping through northwest Europe continues to be constrained on the River Rhine, with conditions in September worse than in late August, and no relief expected in the near future, sources said on Thursday.
Hot weather and low rainfall through most of the summer has reduced the levels of freight ships can carry, causing chronic high transportation costs and supply bottlenecks.
Trading difficulties have led to reduced chemical trade and higher inventories as players struggle to keep supply moving, sources said.
Despite some improvements to conditions in late August, as temperatures started to drop and rainfall increased, the worst conditions seen during the summer returned in September, with water levels dropping as low as 40cm along some parts of the river.
“Water level projections are indicating worse than in the worst point in August,” said a market source.
“We are doing half loads with horrendous logistics costs. It’s a headache.”
Source: Germany's Federal Water Agency (BFG)
BASF, whose flagship Ludwigshafen complex is located along the Rhine, has dealt with the situation by sending more ships in and out of Ludwigshafen carrying less product, a strategy it has pursued for much of the summer, according to a company spokesperson.
The strategy remains workable, but the company has also seen a slight uplift in the amount of product it transports by rail.
“It is the same situation as four weeks ago, water levels are very low. But we can [service] inbound and outbound traffic as planned,” the spokesperson said.
However, the amount of capacity that shipping firms will be able to load may fall further in the near future, according to a source at the company.
“We had some relief on the Rhine [in late August] but it is low again. [Conditions are] still critical, the water levels is simply too low,” the source said.
“Some ship owners say they cannot run at all, others say they are reducing loadings further."
A source at German chemicals producer Evonik described the Rhine water levels as "still pretty shaky", adding: "And there is not too much rain coming."
Pictured: Archive image of BASF's Ludwigshafen site, located along the Rhine Source: BASF
Additional reporting by Nel Weddle