A dry spring and a hot summer has reduced water levels on the Rhine making the movement of barges and low-draft ships difficult. The impact on industry in the area is becoming significant.
On Monday (26/11) BASF, the world’s largest chemical company, issued a statement announcing that its leading German production facility at Ludwigshafen was temporarily halting output of certain products due to the inability of barges to pass fully-laden along the upper Rhine. BASF stated that “the water level of river Rhine is currently on an all-time low, impacting transport by ship. Despite maximum shift to alternative means of transport (pipeline, trucks and rail), not all raw materials can be supplied to BASF’s Ludwigshafen site. Therefore, BASF will have to stop the TDI [toluene diisocyanate] production in Ludwigshafen”. TDI is used in the production of polyurethane. Bearing in-mind reports suggest that barge traffic has almost come to halt on the upper Rhine BASF’s problems may get worse in short-term.
The problems being experienced by BASF are also affecting other chemical producers and even oil refineries on the Rhine that feed into the chemical and oil products markets in Rotterdam. Shell has had to cut production at its Wesseling refinery outside Cologne due to the inability to get oil and oil products in and out of the site. The resulting lack of intermediate-product supply from such sites is also forcing other locations to declare ‘force majeure’ and suspend or reduce production. This even includes Shell’s production site at Stanlow in England.
The Rhine situation is having an as yet unquantified effect on truck and rail freight markets, with the supply of tankers unable to satisfy demand in the region. The Ludwigshafen site alone has an output of 8.5m tonnes of chemicals per annum and 40% of both the inbound feedstock and of the product outbound is moved by river. Although BASF Ludwigshafen has very substantial rail and road freight resources available it would appear to be difficult to supply the capacity to move several million tonnes of – often hazardous- cargo.
With no expectation of a rapid return to normal water levels on the Rhine in the near future, it does suggest that heavy use of barge transport may be a risky option.
Source: Transport Intelligence, November 29, 2018
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