Europe's transport artery is in danger! Rhine water levels plummeting, approaching "closed" levels

By    3 Aug,2022

Recently, European countries are in the quagmire of "hyperinflation" due to the sanctions against Russia, when another piece of bad news came: the water level of the Rhine River, the main artery of European transportation, is dropping sharply and is close to the dangerous "closure" level, which will put the trade of a large number of goods at risk. risk.

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It has been reported that the water level in the German section of the Kaub, which is located in the middle reaches of the Rhine and is a key transit point for the transport of commodities, is expected to drop to 47 centimeters (18.5 inches) by the end of this week. And if the water level drops another 7 cm, ships will be "impassable.


With Russia cutting off gas supplies, sparking inflation, Europe has faced the most serious energy supply crisis in decades. And recent climate change has also exacerbated the continent's plight. As governments try to prevent the energy crisis from plunging the region into recession, an impassable river could stop the flow of everything from fuel to chemicals.


The Rhine, the first river in Western Europe, is 1,288 kilometers long, originating in the northern foothills of the Alps in Switzerland and flowing through Liechtenstein, Austria, France, Germany and the Netherlands before finally emptying into the North Sea near Rotterdam. The river is not only one of the busiest basins in the world, but also an important transportation artery for the riparian countries, especially Germany, and an important route for transporting and exporting heating oil, gasoline, coal and other bulk commodities.


The energy crisis is expected to intensify It is worth noting that low water levels mean that barges must carry less weight in order to navigate the river. And when barges can't carry a full load, more barges are needed to transport the same amount of cargo.

The German Federal Institute of Hydrology (Federal Institute of Hydrology) said in July that it is not economical for barges carrying commodities to sail across the Kaub when the measured water level drops to 40 centimeters or less.


Energy supplier EnBW AG said in a statement, "Low water levels have limited coal shipments because there are fewer vessels available and fewer vessels are loaded. As a result, the cost of transporting coal is rising, which in turn is pushing up the operating costs of coal-fired power plants."


Analysts at JPMorgan noted that the last time water levels fell was in 2018, when disruptions reduced German growth by 0.4 percent in the fourth quarter. This time, the need for the waterway may be even more urgent as a way to bridge the gap in Russia's energy supply.


Josh Folds, European oil analyst at consulting firm Facts Global Energy, said, "Germany and Switzerland will have a hard time building up gasoline/diesel stocks before temperatures drop due to Rhine transport disruptions and the fact that alternative energy sources such as rail and road are looking increasingly expensive."


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