German companies are reporting growing disruption from Rhine water levels that have hit record lows, with chemical producers, utilities, steelmakers and agricultural traders warning of higher costs, transport bottlenecks and curbed production.While
German companies are reporting growing disruption from Rhine water levels that have hit record lows, with chemical producers, utilities, steelmakers and agricultural traders warning of higher costs, transport bottlenecks and curbed production.
While Germany has not yet suffered the widespread production outages experienced during previous Rhine crises, traders said on Tuesday that it was no longer possible to book some cargo shipments after weeks of drought and companies are increasingly reporting operational issues.
Chemicals company Covestro said the lack of transport capacity could not be offset fully despite shifting volumes to trucks and trains wherever possible and it has declared force majeure for products including polyether polyols used in mattresses and refrigerator insulation.
COMPANIES FACE HIGHER FREIGHT COSTS
The Rhine is one of Europe's main arteries for transporting grains, fuels, minerals and manufactured goods, but its shallow waters are increasingly leaving companies facing higher freight costs and a lack of suitable alternatives.
"Alarm bells are ringing loudly: the extremely low water levels are increasingly pushing logistics and supply chains to their limits," Wolfgang Grosse Entrup, CEO of German chemical industry association VCI, told Reuters.
Production at rival Evonik's Marl chemical park has been hampered by reduced cargoes, it said
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