Commodity traders reported on Monday that a heatwave in Western Europe had lowered the water level on Germany's Rhine River. This has affected shipping and increased freight costs for cargo owners as their vessels could not sail fully loaded.

Traders said that low water levels have limited the shipping of goods on the entire river, south of Duisburg, Cologne and the chokepoint at Kaub.

In Duisburg and Cologne, the cargo ships could sail only 40-50% of their capacity.

Shallow water causes vessel operators to increase freight rates in order to compensate for their vessels not being able to sail at full capacity. This increases the need for more vessels to transport cargo and increases the costs for cargo owners.

Traders said that cargo still continues to be delivered by multiple vessels, instead of just one.

The Rhine is a major shipping route for grains, minerals and ores. It also carries coal, oil products including heating oil, as well as other commodities.

This week, a heatwave is expected to hit parts of Germany, including the Rhine region, with temperatures reaching as high as 40° Celsius (104° Fahrenheit) in Cologne.

The traders said that there was no immediate improvement in sight, and the water level could continue to fall.

German companies will also face supply problems and production issues in summer 2022, after a heatwave and drought caused unusually low levels of water on the Rhine. (Reporting and editing by Bernadettebaum, Bernadette Hogan)

(source: Reuters)