Rhine barge rates slump 50% as water levels rise, demand falls
Quantum Commodity Intelligence – The barge freight rate to ship goods from the ARA port hub into Switzerland has effectively halved over the past week as rising water levels mean barges can now carry their maximum load, while at the same time demand has declined.
After peaking at CHF 72/mt ($82/mt) early last week, the barge rate between ARA and Birsfelden – near the Swiss town of Basel – tumbled to just CHF 34/mt on Wednesday, data from Riverlake brokerage showed.
The data means that the rate to ship goods along the entire length of the Rhine River now stands near a two-month low after having lost CHF 30 since last Friday.
"The Rhine rates have experienced a significant fall in the past few days, with the sharpest decline occurring last Monday. The primary reason for this decline is the elevated water level, leading to a substantially higher – if not maximum – barge intake capacity," Riverlake said Wednesday.
For most of July, barges passing Kaub – a shallow, rocky stretch of the Middle Rhine between Koblenz and Frankfurt – have been limited in their intake due to low water levels.
The water level at the chokepoint rose to 180 cm by Wednesday morning, doubling from the sub-90 cm levels seen just a fortnight ago, data from the German Federal Waterways and Shipping Administration (WSV).
It means the watermark is beating the five-year average for early August of 163 cm and is comfortably ahead of the 57 cm and 74 cm measured during the drought years of 2022 and 2018, respectively, which caused logistics troubles later in the year.
The sharp rise in the river level comes after Germany reported its second wettest July in the past five years, according to data from the national DWD weather service.
The buoyant water levels mean barges passing Kaub can now carry their maximum volume of 2,500 mt, compared to the restricted 1,500 mt a fortnight ago, meaning less barge capacity is needed to ship the same volume of goods.
The water level will continue to climb to 220 cm by early next week before drifting lower but remaining above 150 cm for the rest of the month, the short and longer-term WSV forecasts show.
At the same time, inland shipping demand has fizzled out despite an expected uptick for August, further pressuring barge rates.
"Where we observe a decline in the demand for barges to and from the Rhine, we notice that in the ARA region, it remains somewhat tighter for this week," the brokerage said.
