The low water on the Rhine does not only have a direct impact on inland shipping. Industrial production could also suffer, economic experts warn.
According to the President of the Directorate-General for Waterways and Shipping, ships will be able to travel continuously on the Rhine this year despite the persistent drought. He doesn’t expect shipping traffic on the river to stop, Hans-Heinrich Witte told the “Frankfurter Allgemeine Sonntagszeitung”. “It’s theoretically possible, but I don’t think it’s likely.”
However, when the water level is low, the ships could transport considerably less cargo. “That means: cargo space on ships is scarce,” said the head of the authority. This also makes it difficult to transport coal and oil on the Rhine. “Then a lot has to be done by road and rail.”
Low water affects economic output
According to the economist Prof. Stefan Kooths from the Kiel Institute for the World Economy, the economic consequences of the low water level in the Rhine are painful. “Calculations on the consequences of the 2018 low water in the Rhine show that industrial production falls by around 1 percent if the water levels at the Kaub measuring point have fallen below the critical mark of 78 centimeters for a period of 30 days,” explained Kooths.
At its peak, industrial production fell by around 1.5 percent in 2018, Kooths continued. Over the year, the low water is likely to have cost around 0.4 percent of economic output. “However, the situation at that time cannot be transferred one-to-one to today,” explained the scientist. The “height of fall” for German industrial production was much greater at the time.
However, the negative effects of the supply bottlenecks are significantly worse for the industry: “Until recently, due to the supply bottlenecks, industrial production was 7 percent below the level that would have been expected given the incoming orders,” said the Vice President and Economic Director of the Kiel Institute.
“At the moment, however, the fact that the hindrances caused by the low water are affecting supply chains that are already very strained is aggravating.” Inland shipping is also an important means of transport for energy resources. However, based on the experience of 2018, the companies should be better prepared for failures in inland shipping, for example by using other types of ship.
Low water can affect transport chains
However, every additional stress factor depresses economic momentum. And every additional hindrance to production drives up prices, since the discrepancy between demand and supply widens. “From an inflation point of view, it is not just about the consequences of rising transport costs,” explained Kooths.
According to the information, only a small proportion of the goods transported in Germany are transported by inland waterway: in 2017 it was 6 percent. However, for individual groups of goods such as coal, crude oil and natural gas, coke oven and petroleum products, and chemical products, inland shipping accounted for 10 to 30 percent of the transport volume. “These goods are at the beginning of many production chains, so that failures in their transport can lead to production impediments in downstream production stages.”
A shock in a small sector – the share of inland shipping in gross value added in Germany is less than 0.2 percent – could have a significant impact on other sectors.
Level at Kaub just over 40 centimeters
The level at Kaub in Rhineland-Palatinate, which is important for shipping on the Rhine, fell further on Friday. According to the waterways and shipping administration, it was 42 centimeters in the morning and thus around 5 centimeters lower than at the same time the previous day. According to the authority’s forecast, the 40 centimeter mark could fall on Friday.
The depth of the fairway, which is decisive for shipping, was only 1.59 meters on Thursday – lower than in any other section of the Middle and Lower Rhine. That is why Kaub in the Rhein-Lahn district is considered an important point for inland navigation on the Rhine.
The Federal Institute for Hydrology (BfG) recently declared that shallow inland waterway vessels could still pass the Middle Rhine route up to a water level of around 30 to 35 centimeters at the Kaub gauge. However, forecasts assume water levels in the direction of 30 centimeters by the beginning of next week at the Kaub level. Then shipping on the Rhine in this area “tends to come to a standstill,” it said.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
