Low water on the Rhine drives up freight costs and cuts inland cargo capacity

The regional war has already choked the world's maritime arteries — now drought is doing the same to the Rhine, and doing it faster than ever recorded. The gauge at Kaub, the chokepoint that sets how much cargo can move between the North Sea and southern Germany, fell to 25 cm earlier this weekend — matching the all-time record low, which previously wasn't hit until October 2018. Falling water levels are forcing barges to shed cargo to avoid grounding, steadily eroding capacity along the route linking Rotterdam and Antwerp with refineries, chemical complexes, steelworks, and power stations across Germany, France, and Switzerland, according to a Bloomberg piece.

Switzerland is the most exposed link in that chain. The country receives around 30% of its mineral-oil products via the Rhine, with barges carrying refined fuels from the Amsterdam-Rotterdam-Antwerp hub to Basel, according to a press release. A prolonged interruption could force Bern to release strategic stocks within weeks — a decision made harder by the Iran war, which has already pushed prices up and left businesses running leaner inventories than usual.

The river is technically open, but its carrying capacity is collapsing. Specialized low-water barges are still passing Kaub, but average payloads have fallen sharply — to around 800 tons last week, per the Bloomberg piece, from a typical 5.1k tons. That would mean operators now need more than six barges to move what one carried before.

Freight rates are climbing just as fast: The cost of moving goods from Rotterdam to destinations south of Kaub has reportedly jumped to nearly EUR 150 per ton, from around EUR 20 under normal conditions, per the same source.

There is no scalable bypass: Replacing one barge can take upward of 100 trucks. BASF's own figures show the mismatch — an average inland vessel carries around 2k tons, against 1.2-1.5k tons for an entire block train and around 25 tons for a single tank container.