Europe petchems brace for higher logistics costs as Rhine’s water levels fall

LONDON (ICIS)–Worries about the River Rhine’s low water levels are back in the minds of Europe’s petrochemicals players as barges cannot fully load, according to the Rhine Shipping Authority (WSA).

When barges cannot fully load, more barges are needed for the same quantity of tonnage, sharply increasing logistics costs for petrochemicals companies.

The River Rhine is a main waterway for transport of chemicals and oil products as it runs its course alongside some of the major petrochemicals site in Europe, including BASF’s flagship facilities in Ludwigshafen, as well as major industrial strongholds in Germany and The Netherlands.

In 2018, a persistent drought through the summer and autumn brought havoc to European chemicals logistics and sharply increased costs for companies.

BASF said the bill had totalled €200m during the second half of 2018.

“The Rhine water levels are low and keep on decreasing – barges can load partially only. From Monday [23 September] on, some rain is expected but the precipitation seems to be rather limited in the southern part of the Rhine’s catchment area,” said Florian Krekel, from the Rhine Shipping Authority.

“I do expect further decreasing water levels in the foreseeable future (next week) along the Middle-Rhine. Possibly on the Lower-Rhine the situation shows out somewhat different due to higher precipitation in this part of Germany. Barges will have to keep on operating partially loaded.”

Current water levels at the Kaub gauge station stood on Thursday at just over 100cm.

Projections made by waterways information service ELWIS show the Rhine’s levels are expected to decrease to 98cm on 23 September.