Water levels on the River Rhine have steadily declined and fallen to emergency levels this week, indicating more headwinds for the German economy already careening towards recession.
One of the most vital waterways in Europe's economic heartland is below a very important 78 centimeters (31 inches) threshold at a measuring station in Kaub, Germany. As of Wednesday, Kaub sits at 68 centimeters (27 inches) and is dropping fast, indicating that barge transport disruptions could be imminent.
Riverlake, a vessel broker, already says barges hauling goods between Upper Rhine from Rotterdam have reduced weight to about a third of capacity to improve draft in shallow parts of the waterway, according to Bloomberg. For some context, barges on inland waterways haul about 5%-10% of German freight, with about 80% of that on the Rhine, including a third of domestic shipping of crude oil, natural gas, and coal, Berenberg economist Salomon Fiedler wrote Wednesday in a note to clients.
The water crisis on the 800-mile (1,288-kilometer) river that runs from Switzerland to the North Sea is similar to the one in 2018. The previous crisis resulted in transport disruptions that hit industrial production. One noticeable difference is the economy today is sliding toward a recession as it contends with an energy crisis, high inflation, faltering economic growth, and supply chain bottlenecks -- unlike anything ever seen before.
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