The river Rhine is the backbone of the European economy, home to some of the largest steel, automotive, textile and chemical plants in the world, with canals connecting the Rhine to the Baltic Sea, the Mediterranean and the Atlantic Ocean. The river links sites with the international ports of Amsterdam, Rotterdam and Antwerp.
But a lack of rain means the river has dropped to its lowest recorded level, with concerns that it could drop further, causing problems for trade in materials and products. Freight volumes on sections of the waterway have already fallen significantly. The last time industry along the river faced this problem was in 2018 when ship traffic almost came to a complete halt due to drought, with low water levels restricting the loading capacities.
Many of the industries along the river located there decades ago precisely to use it to move raw materials and products and also use the river water as both cooling and process water.
BASF’s Verbund Ludwigshafen site, for example, stretches over 10km along the Rhine. Its three harbours host an average of 12 inland vessels/day transporting raw materials and products to the site in liquid, solid and gaseous form as well as distributing final products to customers.
The level of the Rhine south from Koln, at Kaub, is a key indicator for industry as this is the river’s most critical chokepoint with its rocky bed making it the shallowest part that a ship must navigate between the North Sea and the Upper Rhine. Normally at this time of year, water levels at Kaub stand at around 200 centimetres. The 78-centimetre mark represents a critical threshold: below this level, most barges must reduce cargo loads to avoid running aground. In the last week the water levels at Kaub have been around 25 centimetres. Unless significant rainfall arrives soon, the 2026 crisis will at least match the severity of the 2018 event. With August and September — typically the driest months — still ahead, many observers fear conditions could turn even worse.
Industry along the river does have a number of options to cope with low water levels in the Rhine, such as low-water tankers. Another alternative is transferring to rail transport; however, renovation work is being carried out this summer on a railway line running parallel to the Rhine, between Troisdorf and Wiesbaden, covering the bottleneck at Kaub. Trucking remains a last-resort option: replacing a single barge would demand at least 100 trucks, making this mode viable only for emergencies.
Markus Kamieth, BASF CEO, recently noted that extremely low water levels on the Rhine could lead to some disruption in supply chains in Europe, but speaking to analysts he also said the company is much better prepared than in 2018, by deploying specialised ships that can still carry goods – feedstocks and products – through the Rhine at very, very low water levels, and also due to other contingency measures such as shifting the mode of transport.
Drawing lessons from the severe low-water period of 2018, for example, BASF has already strengthened its resilience against such disruptions. One measure is the custom-built low-water tanker Stolt Ludwigshafen, which the company has used since April 2023. The tanker has a unique design: to achieve a high load-bearing capacity, the dimensions of the new ship are 135 by 17.5 meters, which is considerably larger than conventional tankers on the Rhine. To optimise the cargo capacity, the hull features a special lightweight construction ensuring high structural stability. A special propulsion system, featuring three electric motors, fed by diesel generators, allows safe operation even under extreme low-water conditions.
The system enables the ship to pass the critical point in the river near Kaub with a cargo payload of 800t even at a gauge level of 30cm (corresponding to a water depth of 1.6m). At moderately low water levels (eg Kaub gauge of 100cm), its capacity of around 2300t is twice that of conventional inland vessels; the maximum capacity is 5100t.
Rico Luman, senior sector economist in transport and logistics at ING said the Rhine disruption should not be seen as an isolated event, but as part of a broader pattern of risks that have become increasingly intertwined in global supply chains. Climate change is increasing the frequency and severity of extreme weather events, while geopolitical tensions are leading to conflicts, trade restrictions and protectionist policies, and together these create a more volatile operating environment for businesses.
'Heightened supply chain uncertainty has become a defining feature of the global economy,' he wrote.
A low Rhine can have a significant impact: research into the 2018 drought suggests that it affected the German economy through both transport and production channels, taking perhaps as much as 0.3 percentage points off German GDP growth.
Further reading
- Chemicals industry M&A: The trends ahead
- Chemicals: US specialties show more growth
- Critical minerals: Why supply chain worries have gone from risk to reality
- EU ETS update: What the changes mean for the chemicals industry
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