The Rhine: Drought and Disruption

On 2nd August, German authorities issued warnings that water levels in the Rhine were abnormally low, and that commercial transport may be forced to stop.

The river has since deteriorated to the point where the worst-hit areas are as shallow as 40cm, halting the majority of traffic. The drought has been caused by a record breaking summer across Europe, with Germany reaching peak temperatures of 39.2°C in late June.

The Rhine and surrounding waterways are an integral part of Germany’s logistics chain, and feed goods from major western ports into the heart of European industry.

Roughly 200 million tonnes of cargo are shipped on German rivers annually with the majority of it moving along the Rhine. Of particular concern is the halting of coal barges, which have been crucial in maintaining German energy security after Russian natural gas flows were cut by 80%  in July.

Water levels are likely to further deplete over the next week, with temperatures above 30°C predicted until 19th August. This raises the worrying question of whether the river will be able to recover in time to stock critical coal stores ahead of winter.

There is also the economic impact to consider: a similar drought in 2018 blocked export flows and took Germany to the brink of recession by January 2019. When combined with the wider European energy crisis and creeping inflation from borrowing during COVID-19, it is likely that Germany will tip into recession by 2023.

Over the next five years, droughts are highly likely to increase across Europe as the effects of global warming begin to manifest.

Although the impacts of this drought have been relatively localised, any similar event effecting the Danube or other arterial rivers has the potential to bottleneck vital grain exports from Central Europe; almost certainly exacerbating food insecurity across North Africa and the Middle East.

Overall, this event serves as a stark warning of the growing threat to European supply chains from climate-related risk, and highlights the importance of supply chain resilience to both government and business.