‘We have a 4,000-tonne vessel, but due to the low tide it can still carry a maximum load of 2,500 tonnes,’ says Kris Rademakers, responsible for purchasing and sales at Groep Van Pelt.
The family business is one of the largest building materials traders in Flanders. Since Monday, Van Pelt has been charging an extra low water surcharge of just under half a euro per tonne for the supply of river sand or gravel. ‘The Rhine material is the Rolls-Royce of concrete production, but in recent years the low water levels have made transport more difficult,’ says Rademakers. ‘In May and June we also had to charge a surcharge to cover the increased transport costs.’
Van Pelt is by no means the only one. ‘Due to the drop in the water level, our ships cannot carry their full cargo and we have to deliver smaller volumes, resulting in increased freight costs per tonne of product’, says a customer communication from Satic-Minerva, an Antwerp supplier of building materials.
An industry wholesaler who prefers to remain anonymous says that the low water surcharges are currently too high to be able to bear themselves. ‘We have to pass on those costs to the customer, otherwise we would go into the red.’
Some concrete producers have become semi-weathermen. They know perfectly when drought is coming and quickly order a ship before the water drops.
The extra transport invoice is not new. The Rhine is a crucial transport route to get a variety of goods from Switzerland and the German industrial areas to Belgium and the Netherlands. The contracts with shipping companies contain standard agreements about compensation for low water costs. ‘It is something that we experience almost every summer,’ says Gisèle Maes, the CEO of the Antwerp shipping company Victrol. ‘Every carrier has set reference levels in its contracts. If the water drops below that, he may charge a surcharge. For the time being that allowance is still limited. ‘
In the autumn of 2018, the water level in the Rhine dropped so dramatically that shipping traffic came to a standstill in some places and factories had to close. Anyone who could still get hold of a lightweight transport had to pay a lot extra for it.
‘If ships can hardly sail anymore and they can only take very small cargoes with them, there will be free negotiations with substantial surcharges,’ says Maes. ‘But that situation is still a long way off. If the current warm weather continues for another four to five weeks, you will of course get into a different story, but there has been quite a bit of precipitation in the Alps. So the expectations are still decent. Due to corona, many ships are also empty, so there is more than enough capacity. There is no need to panic. ‘
At the brick and roof tile manufacturer Wienerberger, they are less confident about this. ‘In May and June we already had to pay a low water surcharge for the import of the German Westerwald clay from which we make facing bricks and roof tiles,’ says Caroline Van de Velde, the CEO of the Belgian branch of the Austrian group. ‘The allowance then increased to an extra 20 percent. In July the situation on the Rhine was better and there was a lot of rainfall, but with the current summer climate the water level will drop again and there will certainly be low water surcharges again. ‘
In May and June we already had to pay a low water surcharge of up to 20 percent extra for the import of German Westerwald clay.
Global warming has made the Rhine extra vulnerable. The Alpine glaciers shrink, which means that there is less supply of melt water from the mountains in the summer months. The vital lifeline for the European economy is thus losing its buffers and becoming increasingly dependent on the amount of rainfall that falls. ‘We are going to experience this more and more due to climate change,’ says Rademakers. ‘In the drama year 2018, a low water surcharge even had to be paid for nine months, of sometimes 2 euros per ton. For a large concrete producer that needs 100,000 tonnes of gravel per year, you can speak of an extra cost price that can amount to 200,000 euros per year. ‘
The water level in the Rhine is something that major concrete producers are increasingly taking into account. ‘That was not an issue in the past, but nowadays some customers have become half weathermen,’ says Rademakers. ‘They know perfectly when drought is coming and then quickly order a ship. Or they wait a little longer to replenish their depot, hoping it will rain and they won’t have to pay the surcharge. ‘
Draft restrictions in Flanders
We have to pass on those costs to the customer, otherwise we would go into the red.
The situation is also worrying in Flanders. After an extremely dry spring, the summer started lagging behind. July was not too bad, but due to the current heat wave, the Flemish agency Waterwegen en Zeekanaal introduced extra restrictions on canals and rivers last week. At various places, such as the Ghent-Ostend Canal and the Upper Scheldt, the maximum allowed draft has already been limited by 20 centimeters. “The heaviest ships are no longer allowed to sail fully loaded,” says spokeswoman Liliane Stinissen. “They have to leave some of their freight aside.”
Restrictions also apply on the busiest shipping route, the Albert Canal, and water is pumped up upstream to maintain the flow. To prevent the water from draining too quickly into the sea, locks are only used when they are completely full. As a result, it can take up to four hours for a ship to pass through the lock in Wijnegem and up to two hours in the other places. ‘A ship that is stationary costs money,’ Rademakers concludes. “It’s not dramatic for a while, but it shouldn’t last for weeks.”