Europe has experienced an unprecedented drought and heatwave this summer, causing a sharp drop in water levels on major waterways such as the Rhine and Danube. This has disrupted inland waterway transport and driven up costs, which may ultimately be borne by ordinary consumers.
The situation is particularly dire on the German Rhine, the lifeline of Europe's inland waterway transport. "The current situation is unprecedented," said a spokesperson for Danish shipping giant Maersk. "Most inland ports along the Rhine are no longer navigable." The freight forwarders' association Clecat noted that the water level at the Koub section, a key bottleneck in Rhine shipping, dropped to about 6 centimeters on August 14, breaking the previous record low of 25 centimeters set in 2018. The impact extends from the Rotterdam industrial corridor to the middle and lower reaches of the Danube, especially in Serbia, Hungary, and Romania.
To mitigate losses, logistics companies are shifting cargo to rail and road, but capacity is limited. Officials at the Strasbourg Waterway Authority (VNF) in France estimate that a single cargo shipment requires 100 to 200 trucks. The average cargo load on Rhine vessels plummeted from 1,500 tons to 400 tons in August. Clecat points out that low water levels have driven up transportation costs, caused delays, and reduced production flexibility. Roland Berger expert Schappenzier stated that ships are forced to reduce their load to lower their draft. Since fixed costs remain unchanged, this will lead to a significant increase in unit transportation costs.
As water levels continue to drop, shipping companies have begun levying low-water surcharges to pass on costs. In severely affected areas such as Kob and Colón, the surcharge per container has exceeded €1,000 (approximately US$1,170). Sogestran Logistics director Kosal stated that container shipping costs "could soon double," and the increase for bulk cargo could be even higher.
Clecat notes that whether rising logistics costs will be passed on to consumers depends on the duration of disruptions, the type of goods, and companies' ability to absorb costs. However, for commodities where transportation costs account for a high percentage of the final price, continued cost increases will eventually be passed on along the supply chain. Industry insiders say it is too early to predict consumer price increases, but companies will find it difficult to fully absorb the additional costs.
As the drought worsens, shipping companies are considering using vessels better suited to low water levels and strengthening multimodal transport, including rail and road transport. Meanwhile, water resource management has become crucial for enhancing shipping resilience. France has regulated the Rhine's flow by constructing water storage facilities and diversion channels, while the Rhine within Germany remains highly dependent on rainfall.
Although the number of vessels navigating the Rhine daily increased from 10 to 25 on August 19, including 14 carrying cargo, VNF stated that there is still a significant gap to return to normal transport capacity.
