Recurring periods of extreme heat – with temperatures in excess of 107℉ in a number of places - and near-zero rainfall have intensified the pressures on some of Western Europe’s freight transport corridors, the prime example being the Rhine, the continent’s single-most important inland waterway for trade.
Wildfires, particularly in France and Spain, have also created headaches in shipping goods from A to B and beyond.
Low Water on Rhine Threatens German GDP
An estimated 300 million tons of bulk and containerized goods are transported on the Rhine annually, connecting the major ports of Rotterdam and Antwerp, in the Netherlands and Belgium respectively, with Germany’s industrial heartlands.
Earlier this week, the Kiel Institute for the World Economy warned that the impact of the low water levels could trigger a slight contraction in Germany’s GDP in the third quarter, compromising the timid recovery in Europe’s biggest economy and increasing the risk of stagnation.
Surcharges On Barge Operations
The latest data issued by German tri-modal transport operator Contargo shows just how difficult navigational conditions have become.
The gauge at Kaub, situated along the middle section of the river, west of Frankfurt, and its most constrained navigable passage, has a ‘critical’ level of 40 cms (around 16 inches). On July 31, it had dipped to 22 cms and is forecast to fall to 21 cms on August 1 before rising to 30 cm the following day.
Contargo is applying low water surcharges for water levels of 40 cm and below at Kaub and for all terminals south of Koblenz of €1,075 (approximately $1,231) per full 20-foot container and€1,280 per full 40-foot box.
The increase in surcharges compared to previous low-water periods is largely due to the significant rise in ship charter costs, it noted.
“Should the low water situation lead to a temporary restriction or suspension of regular inland shipping services in the Upper Rhine and Middle Rhine regions, we will increasingly focus the available barge capacity on the Lower Rhine,” a company spokesperson told AJOT.
“However, barge carrying capacities in this region have also already been significantly reduced due to limited loading drafts. As a result, additional barge space will be required to handle existing transport volumes.”
Limited Options
Under normal circumstances, rail freight, with its high volume of capacity, could step in to take the strain off barge transport.
However, scope for modal shift to trains is very limited as major work to modernize Germany’s rail network infrastructure has led to the closure of traffic on the right bank of the Rhine, a major corridor, until December 2026.
Nevertheless, for the past week and more, Contargo’s teams have been engaged in “intensive discussions” with various railway operators, terminal operators, and other partners to establish additional connections and alternative routings.
“Our primary focus continues to be on maintaining connections between the seaports of Rotterdam and Antwerp and the Rhine hinterland, either by increasing the frequency of existing rail services or by introducing so-called bypass services. These bypass services bridge the Upper and Middle Rhine sections by rail.”
Securing capacity on suitable diversion routes was “extremely challenging” as the standard diversion corridors (the left-bank Rhine line and the Siegerland route) were already operating at full capacity “because they are handling traffic diverted as a result of the ongoing major refurbishment of the right-bank line,” the Contargo spokesperson observed.
The remaining alternative routes are significantly longer, more than 200 km one-way (around 125 miles) and require substantially more resources, including locomotive crews, locomotives and wagons. “As a result, our rail service providers are reaching the limits of their available resources, and train rotation concepts have to be redesigned accordingly.”
Greater Use of Road Haulage
With rail under significant restrictions in substituting for barges, Contargo has informed customers that in order to maintain services it may become necessary to increase the use of truck transportation between its terminals located on the Upper and Middle Rhine and those on the Lower section of the river.
“From there, containers will continue to be transported to and from the seaports by barge wherever possible. However, available capacities are restricted here as well.”
In order to move containers as quickly as possible, Contargo is increasingly routing shipments via various trans-shipment and transport hubs, which could result in storage, demurrage, and detention charges.
While “remaining committed to doing everything possible to ensure reliable transport operations under these challenging conditions,” Contargo has made it clear to customers that it “does not accept liability for delays, additional costs, or any other consequences arising directly or indirectly from the current low water situation or from the operational measures required as a result.”
Disruption in France and Spain
Extreme heat and wildfires are also adding to the disruption to European freight transport networks.
‘Mega’ blazes in south-west France began on July 22, burning an area four times the size of Paris and leading to the evacuation of more than 220,000 people
At one point, the flames were only eight miles from the suburbs of Bordeaux.
Rail and road freight traffic have been hit by the wildfires over the past week.
All trains running south from Bordeaux towards Bayonne, near the Basque Country and Spain, via the Atlantic Coast and vice versa, were suspended until further notice.
Alexandre Gallo, who heads DB Cargo France, a subsidiary of German state railways, Deutsche Bahn, told AJOT that he had been forced to cancel a scheduled program of five freight trains per day which would normally transport road trailers and automobiles on the route on what is a key route.
He said the company had been informed several days ago that traffic on the rail line would not resume before Friday (31 July) at the earliest. An update has yet to be issued by the French authorities.
It is unclear whether the line itself has been damaged by the wildfires.
As for road freight, a major corridor for truck traffic between Spain and France had been closed in a south-north direction since July 26.
An estimated 10,000 lorries per day use the route between Spain and Bordeaux, travelling in both directions. It was scheduled to open on Thursday (July 31) afternoon local time to the relief of shippers and haulers.
Meanwhile, in Spain, a wildfire, labelled ‘The Monster’, has been burning in the Sierra Oeste region, just west of Madrid.
Logistics and forwarding giant Kuehne + Nagel quoted local media, which highlighted that the blazes in Spain had significantly disrupted road transport and led to multiple major highways being closed.
Earlier this week, its peer DHL warned of possible delays to transportation, pickups, and deliveries in both the Madrid and Bordeaux regions.
Improving Situation?
’The Monster’ is now thought to be largely contained, but the Spanish authorities are also watchful of the development of a smaller fire in eastern Spain, near the port city of Valencia.
While the situation remains dynamic, overall, it appears to be improving. Real progress was reported overnight Thursday in preventing the blazes from spreading.
However, with the fourth heatwave of the summer driving up temperatures again in France and Spain and elsewhere in Europe and given the poor outlook when it comes to the droughts easing, the risk of disruption to freight networks is likely to persist throughout the summer.
