Drought-driven low water on the Rhine has forced barges to reduce cargo loads,
raising freight costs and threatening supply chains for German manufacturers
reliant on river shipments of coal, crude and chemicals, German inland waterways
association (BDB) deputy director Fabian Spiess said. The Kiel Institute
estimates the multi-month low-water episode in 2018 cut German economic output
by about 0.4%. Deutsche Bank economist Marc Schattenberg said the situation is
aggravated this year by the closure of a key rail freight line on the Rhine's
right bank for construction, limiting rail substitution capacity. Low Rhine
levels could also add to inflationary pressure; ECB board member SCHNABEL has
flagged river water levels as a possible factor keeping inflation elevated as
the ECB weighs further tightening.
