• Water levels and navigating conditions on the Rhine and Danube were slightly more severe in 2020 than in 2019, but better than in 2018.
• Freight rates decreased for most cargo groups in 2020, although exceptions such as construction materials on the Rhine and agribulk on the Danube existed.
• For the last ten years, the annual averages of dry and liquid cargo freight rates in the Rhine region followed an upward tendency.

 
 

WATER LEVELS AND AVAILABLE VESSELS’ DRAUGHT AT GAUGING STATIONS ON RHINE AND DANUBE

  • The available draught for a vessel at a certain gauge station is calculated with the formula:9
    possible or available draught = minimum navigation channel depth + (actual water level – equivalent water level) – under keel clearance.
  • If the actual water level equals the equivalent water level (indicating that the water level is very low), the difference (actual water level – equivalent water level) will be zero. In this case, the possible draught of a vessel should still be equal to the minimum channel depth minus the under-keel clearance (see illustration).
  •  

    FIGURE 1: ACTUAL WATER LEVEL, ACTUAL DRAUGHT, EQUIVALENT WATER LEVEL, MINIMUM NAVIGATION CHANNEL DEPTH AND POSSIBLE OR AVAILABLE DRAUGHT AT KAUB/ MIDDLE RHIN *


    In this illustration, the date chosen to determine the available or possible draught is 3 September 2020, when the actual water level was 239 cm on average.
     

  • Table 1 shows the analysis of daily data for gauge stations on the Rhine and Danube for the three years 2018, 2019 and 2020. It was found that an available draught which equals at least the minimum navigation channel depth of 1.90 m was achieved at Kaub:
    – In 2018: on 63.5% of all days per year
    – In 2019: on 98.3% of all days per year
    – In 2020: on 87.3% of all days per year
  • The fact that the ‘achievement rate’ in 2018 and 2020 was lower than the target rate of 95% reflects the occurrence of strong low water periods in both years.
  • Duisburg-Ruhrort at the Lower Rhine offers higher water levels, channel depths and possible draughts in general, due to different morphological characteristics of the Rhine at this point. This is reflected by a higher target depth (2.80 m), but it was only in 2019 that this target could be reached at a rate of at least 95%.
  • Equivalent calculations can be carried out for the Danube. Two gauge stations on the Upper Danube in Austria are considered: Kienstock (122 km east of Linz and 90 km west of Vienna) and Wildungsmauer (250 km east of Linz and 38 km east of Vienna). The target depth for both stations is 2.50 m.
  • Better navigation conditions are observed for all four stations for the year 2019 compared to the strong low water year of 2018. In 2020 a relatively sizeable decrease can be noted due to the return of intense heat and dryness in summer 2020, with a reoccurrence of lower water levels.
  •  

    TABLE 1: ACHIEVEMENT OF MINIMUM NAVIGATION CHANNEL DEPTH AS AVAILABLE DRAUGHT IN 2018-2020 (IN % OF ALL DAYS PER YEAR)

    Gauge stationMinimum navigation channel depth under the EWL*201820192020
    Kaub (Middle Rhine)190cm63.5%98.3%87.3%
    Duisburg Ruhrort (Lower Rhine)280cm62.3%95.3%83.6%
    Kienstock (Upper Danube)250cm50.4%63.3%57.4%
    Wildungsmauer (Upper Danube)250cm43.3%53.4%46.2%

    Sources: CCNR calculation based on data from the German Federal Waterways and Shipping Administration, provided by the German Federal Institute of Hydrology (BfG), and based on data from the Federal State of Lower Austria.
    *EWL: Equivalent Water Level

     

  • The percentage values for the two Austrian Danube gauge stations are overall in line with information provided by the Danube Commission on navigating conditions on the Danube in 2020. According to the market observation report for the Danube, sufficient water supply was ensured only in March, which allowed the loading of freight vessels at a draught of 250 – 270 cm. For other months, this draught level was not achieved.

 
 

FREIGHT RATES IN THE RHINE REGION

    DRY CARGO FREIGHT RATES IN THE RHINE REGION

    • In 2020, the dry cargo freight rates in the Rhine region remained below the 2019 levels, with the exception of freight rates for construction materials. A recovery became visible towards the second half of the year 2020 for the Lower and Middle Rhine whereas the situation on the Upper Rhine did not show a recovery.
    • From a long-term perspective, an upward tendency is seen for dry cargo freight rates in the Rhine region. However, the high value of the index in the year 2018 is certainly an exception, as it was mainly caused by the low water period in that year.
    •  

      FIGURE 2: PANTEIA FREIGHT RATE INDEX FOR DRY CARGO TRANSPORT IN THE RHINE AREA (INDEX 2015 = 100)


      Source: Panteia
       

      FIGURE 3: PANTEIA FREIGHT RATE INDEX FOR DRY CARGO TRANSPORT ACORDING TO GOODS SEGMENT (INDEX 2015 = 100)


      Source: Panteia
       

    • The dry cargo freight rates according to goods segments show significant decreases throughout the first half of the year 2020 compared to 2019. The recovery began around the third quarter of 2020. The goods segment of metals suffered the highest loss due to a lower transport demand partly linked to the reduction of automobile production and thus started its recovery around the last quarter of 2020. Similarly, coal and iron ore show the first half of the year to be weak but reaching a small peak around October 2020.
    •  
       

    LIQUID CARGO FREIGHT RATES IN THE RHINE REGION

    • The liquid cargo freight rate index captured in figure 4 illustrates that liquid cargo freight rates for gasoil on the Rhine have followed a slightly increasing trend since 2010. The low water periods of 2011, 2015 and 2018 are hereby considered as positive outliers to this trend. Due to the Covid pandemic, the above-mentioned positive trend came to a halt. This is the case for all three stretches of the Rhine (Lower, Middle, Upper Rhine). The development of the freight rate index for gasoline on the Rhine is very similar to the graph for gasoil.
    •  

      FIGURE 4: PJK FREIGHT RATE INDEX FOR LIQUID CARGO TRANSPORT IN THE RHINE AREA (INDEX 2015 = 100)


      Source: CCNR calculation based on PJK International

 
 

FREIGHT RATES IN THE FARAG REGION10

  • For the liquid cargo transport within the extended ARA region, a dataset on spot market freight rates provided by the tanker barge corporation CITBO11 was analysed. Within the spot market data, the shares of the different product groups were as follows:
    – Gasoil and components: share of 55% in 2020 (50% in 2019, 47% in 2018)
    – Gasoline and components: share of 21% in 2020 (26% in 2019 and 35% in 2018)
    – Biodiesel: share of 17.6% in 2020 (15% in 2019 and 11% in 2018)
    – Chemicals: share of 5.4% in 2020 (9% in 2019 and 8% in 2018)
    – Heavy and other products: share of 1.1% in 2020 (1% in 2019 and 2018).
  • Of all liquid cargo transported during the period under study (January until December 2020), 36% was loaded in Antwerp, 34% in Rotterdam, 9% in Flushing, 7% in Amsterdam, and 16% in all other ports. Regarding the ports of unloading: around 27% of the volumes were unloaded in Antwerp, 18% in Rotterdam, and 13% in Amsterdam. The rest was unloaded in other regions with a focus on Belgium, the Netherlands, Germany and Switzerland. Overall, the ports of unloading are geographically more diversified than the ports of loading, which reflects the logistics of mineral oil products (origin of products often in the FARAG region, demand side and consumers often in the near and far hinterland).
  • A freight rate index was calculated for gasoil and components, gasoline and components and biodiesel, based on the spot market freight rates.12 For these three cargo segments, freight rates followed quite different trends in 2020:
    Gasoil and components: a clear peak in April 2020 can be observed, which is explained by the sharp drop in oil and gasoil prices during the start of the pandemic. The price drop resulted in a higher demand for storage, as storing oil products is a means of benefitting from higher prices in the future. The storage activities resulted in more transport demand, so that freight rates for gasoil and components rose for a short period of time. However, when maximum storage capacity was reached, this extra activity subsided, so that freight rates dropped below pre-pandemic levels.
    Gasoline and components: a very stable development throughout the year 2020 is noticeable.
    Biodiesel: a clear peak in April 2020 can be seen, for which the explanation of gasoil and components can be applied as well. The overall trend during the year 2020 was downward orientated.
  • Gasoline and its components had the highest average spot market freight rates in absolute terms (€/tonne), as these trips are on average relatively long and therefore have to cover higher absolute costs (more fuel consumption, etc.). Transport of gasoline and components had an average duration of 21 hours, compared to 15 hours for gasoil and components. In 2020 the goods segment with the highest average duration of trips was Biodiesel with 25 hours.
  •  

    FIGURES 5, 6 AND 7: CITBO FREIGHT RATE INDEX FOR LIQUID CARGO SEGMENTS (INDEX AUGUST 2017 = 100)




    Source: CCNR analysis based on CITBO spot market freight rates

 
 

FREIGHT RATES IN THE DANUBE REGION

  • Freight rates, although partly dependent on fuel prices, were mainly influenced by transport demand. Freight rates for upstream transport saw a decrease of 8% on average in the year 2020 whereas transport prices downstream saw an increase of 10%. These trends reflect the development of goods transportation. Iron ore, which is transported upstream on the Danube, faced a decline in demand due to the slowdown of automobile production but began to recover towards the end of year, in the fourth quarter. Downstream transport embraces mainly agricultural products which saw an increase throughout the year as can be seen by the downstream freight rate index.
  •  

    FIGURE 8: FREIGHT RATE INDEX 2020 BY QUARTER – DANUBE (INDEX Q4 2019 = 100)


    Source: market observation report of the Danube Commission

• The ongoing Covid pandemic continues to weigh on economic indicators. Possible delays in the vaccination rollout and the threat of new variants of the virus produce uncertainty that is felt in all sectors.
• GDP decreased by 6.1% in 2020 in the EU. This is a stronger reduction than the one forecast a year ago.
• While the recovery path is still uncertain, GDP forecasts for 2021 and 2022 point to a recovery with expected growth rates of 4.4% in 2021 and 4% in 2022.
• The price of oil increased at the end of 2020 as a rebound effect, while iron ore prices saw an increase of 26% between 2020 and 2021 as a result of the Chinese recovery.

 
Gross Domestic Product (GDP) outlook

  • The Covid pandemic continued to have a detrimental effect on citizens’ lives in the year 2020 on a global scale. The crisis weighed heavily on many economic sectors. Global production slowed down sharply as a result of the various shutdowns in both advanced and developing economies. World GDP decreased by 3%, with a more severe decline within the EU (-6%).
  • Due to the reopening of economies in the year 2020 before the second wave of contagion, the GDP decreased less severely than expected in the International Monetary Fund’s (IMF) October 2020 World Economic Outlook (WEO).1 According to the WEO published in April 2021, the global growth projection for the current year is 6%, moderating to 4.4% in 2022.
  • Possible bottlenecks and the possible emergence of new, more dangerous virus mutations are critical points that could endanger and thus delay economic recovery or even lead to economic scarring. For this reason, uncertainty is predominant and forecasts for the future must be even more cautious than usual.
  • The political action of governments is proving to be a decisive variable in the recovery. The outlook for the US economy has been revised upwards, in light of the massive relief packages that the Biden administration has allocated to combat the health and economic crisis.
  • Conversely, it appears that the economic crisis will perpetuate in Europe, both as an effect of the vaccination bottlenecks at the beginning of the year and due to the inability to provide comparable relief measures. This is leading to increasing diverging paths between the USA and the EU.2 An additional uneven cadence in reopening and reclosing the economies tied to the bottlenecks stated above, result in varying recovery paths.
  •  

    FIGURE 1: PERCENTAGE CHANGE IN GDP, CONSTANT PRICES


    Source: IMF World Economic Outlook Database, Outlook from April 2021: World Economic Outlook Database, April 2021 (imf.org)
     

Trade barriers

  • Global trade is expected to increase by 8.4%, while tourism is likely to suffer from the uncertainties of the pandemic for a longer period. Protectionist tendencies that already existed before the pandemic could slow down the global economic recovery.

 
Commodity prices and output in IWT related branches

  • In 2020, the restrictions on domestic and international mobility provoked a decline in oil demand. After the positive start of the vaccination rollout, prices rose by 41% in 2021 compared to 2020. However, futures markets indicate that this increase is a rebound effect and that oil prices will resume their downward trend in future years, reaching 52 US dollars per barrel in 2026.3
  • Furthermore, difficulties encountered due to the vaccination campaigns and the second wave led to a weakening in demand for oil at the beginning of the year 2021, highlighting once again the feeling of uncertainty that was affecting every sector. The very moderate oil price level that is forecast for the coming years reflects also projections that GDP will remain well below the pre-pandemic trend path until 2024 for most countries. However, if economic recovery is faster and stronger than expected, then the oil price trajectory would certainly be more upward orientated.
  •  

    FIGURE 2: CRUDE OIL (PETROLEUM), DATED BRENT, LIGHT BLEND 38 API, FOR UK, US $ PER BARREL


    Source: IMF World Economic Outlook Database, Outlook from April 2021
     

  • Metal prices have increased since 2017, and this rise has accelerated in 2021. The acceleration was driven by a higher demand for basic metals on a global scale and by the rebound effect of Chinese recovery. With regard to iron ore, its price saw a steep increase of 26% between 2020 and 2021, continuing on a positive trend upheld by the recovery of Chinese steel production, which accounts for the largest part of steel production on a global scale today. Overall, metal and iron ore prices are expected to remain on a similarly high level in the coming years as it has been the case in 2021. The share of European steel production within world production is decreasing further, while China’s share continues to increase.
  • Food prices have seen a general increase over the past year, particularly pronounced in the case of cereal prices and vegetable oil prices. Several factors drove this trend in 2020, including poor harvests in Europe and in the Great Plains region of the US, strong demand from China and a restrictive tax on wheat exports planned by Russia, one of the largest producers of wheat in the world. The smaller harvest result in Europe tends to be felt not only in terms of higher prices, but also in terms of a weaker grain transport in 2021 on European inland waterways (See chapter 8).
  • Transport performance (TKM) on inland waterways in the EU decreased by 8.1% in the first three quarters of 2020, compared to the same period in 2019. In the two largest inland waterways transport (IWT) countries there was a decrease of -11.9% (Germany) and -6.8% (the Netherlands). In the Danube countries, transport performance was 9% lower. Overall, these rates of change were less negative than had been expected in early 2020 when the pandemic broke out.
  • For the Rhine, a decrease of 11% is observed. The differentiation of transport demand by type of cargo reveals the following: In the first three quarters of 2020, dry cargo transport on the Rhine decreased by 13%, liquid cargo transport by 7% and container transport by 5%. The transport demand related to the steel industry represents 25% of total Rhine transport and suffered heavily from the pandemic, which explains the sharp decrease in dry cargo transport. In the Netherlands, the reduction was 6% for dry cargo transport, 3% for liquid cargo transport, while container transport increased by 2%. Container transport also recorded higher levels in Belgium, compared to the first three quarters of 2019.
  • For passenger transport, the initial loss estimations were confirmed by the developments in 2020. As expected in early 2020, the activity in passenger transport collapsed almost entirely in 2020. A reduction of 90-95% in the number of passengers is observed for river cruising.
  • With the drop in oil prices due to the pandemic, fuel prices (gasoil/diesel) fell by 32% between Q1 2020 and Q2 2020. Between Q2 and Q3 they rose again (by 17%), in parallel with the partial reopening of the European economies. Between Q3 and Q4, fuel prices dropped by 3%. In 2021, fuel prices in IWT are expected to increase by 5-7%, in parallel with oil prices, for which different forecasts point to a limited uptake.
  • Other costs in inland navigation are expected to increase to a limited extent in 2021, with the only exception being capital costs, where a reduction of interest rates and insurance values of ships should lead to a decrease.
  • A special chapter of the report is dedicated to France, where sands, stones and building materials represent the largest cargo segment. Its transport performance follows a positive trend. The segment was affected by the Covid-19 crisis in March and April 2020, but transport performance recovered in the course of May and June back to pre-crisis levels. Agricultural products are the second largest cargo segment in France and its transport demand is closely associated with harvest results. After a good harvest season in 2019, the 2020 season was somewhat weak, which will have a negative effect on the transport of grain in 2021.

• In France, the cargo segment of sands, stones and building materials is the largest segment in IWT. Its transport performance follows a positive trend. The segment was affected by the Covid crisis in March and April, but transport performance recovered until June to pre-crisis levels.
• Agricultural products are the second largest cargo segment in France. Its transport demand is closely linked with harvest results. After a good harvest season in 2019, the 2020 season was quite weak, which will affect transport of grain in 2021.

 
 

INLAND WATERWAY TRAFFIC IN FRENCH PORTS


    Sources : Ministère de la Transition écologique et solidaire, Voies Navigables de France

 

FACT SHEET IWT IN FRANCE – ANNUAL FIGURES


     

    Notes on the factsheet: ‘Share in EU total’ contains figures for the EU plus Switzerland and Serbia.
    In contrast to transport performance, for transport volume, a country-specific share cannot be calculated.
    The modal split share is defined as the percentage of inland waterway freight transport performance (in TKM) within total land-based transport performance. Land-based freight transport modes include road, rail and inland waterways. The road freight activity is reported according to the territoriality principle, where international road freight transport data are redistributed according to the national territories of where the transport actually takes place. These principles are implemented in the Eurostat series [tran_hv_frmod].

     
     

IWW FREIGHT TRANSPORT IN FRANCE FOR THE TWO LARGEST CARGO SEGMENTS

  • The Covid-19 pandemic had a V-shaped impact on the transport performance for sands, stones and gravel. The trough of this downturn was in April 2020. During the month of May, a recovery set in, which was completed in June 2020. The positive long-run trend reflects several influencing factors (demographic growth in France, rise in construction output). Short-run factors relate to individual one-off construction projects. The Olympic Games 2024 in Paris are an important example. From May until the end of October 2020, 125,000 tonnes of excavated material for the Olympic Village was transported on the river Seine (Source: Journal NPI, 01/2021, « Une dynamique dans différentes métropoles »).
  •  

    FIGURE 1: TRANSPORT PERFORMANCE FOR SANDS, STONES, BUILDING MATERIALS IN IWT IN FRANCE (IN MILLION TKM)


    Sources: Ministère de la Transition écologique et solidaire, Données et études statistiques, CCNR calculation
     

  • For agricultural and food products, the positive trend since 2017 is mainly explained by the development of harvest results (In France, inland waterway transport of agricultural products is closely correlated with harvest results. See: EU/CCNR (2018), Inland Navigation in Europe – Annual Market Observation Report, Chapter 9). According to Eurostat data (Eurostat series [APRO_CPSH1], Cereals for grain production (including seed production), (C0000)), grain harvest in France amounted to 71.8 million tonnes in 2015, but dropped to 53.6 million tonnes in 2016. In the years 2017-2019, volumes recovered and reached 70.4 million tonnes in 2019. In 2020, however, grain harvest in France was only 56.7 million tonnes. A dampening of the positive trend can therefore be expected for 2021.
  • In the river-sea-port of Rouen, which is among the three largest ports in Europe for the export of cereals, the modal split share of IWT, for grain coming from the hinterland to the port, rose slightly in recent years. It reached 32% in 2020, according to information from the logistics company which exploits the terminals.
  •  

    FIGURE 2: TRANSPORT PERFORMANCE FOR AGRICULTURAL AND FOOD PRODUCTS IN IWT IN FRANCE (IN MILLION TKM)


    Sources: Ministère de la Transition écologique et solidaire, Données et études statistiques, CCNR calculation

• The year 2020 offered rather positive navigation conditions on the Rhine. At Kaub (Middle Rhine), the available draught was at least 1.90 m or higher on 87.3% of all days per year, compared to 98.3% in 2019 and only 63.5% in 2018.
• Fuel prices (gasoil/diesel) fell by 32 % between Q1 2020 and Q2 2020. Between Q2 and Q3 they rose again (by 17%) but dropped by 3 % between Q3 and Q4.
• For 2021, fuel prices are expected to experience a limited increase by 5-7%, based on oil price forecasts.

 
 

IMPACT OF WATER LEVEL CONDITIONS

  • The Waterway and Shipping Administration endeavours to achieve a minimum navigation channel depth for each gauge station, also under critical low water conditions. This minimum depth is represented by the vertical distance below a critical low water level. The critical low water level is known as equivalent water level. It is normally exceeded on at least 95% of all days per year. The following table shows these parameters, which are specific for each gauge station, for Kaub (Middle Rhine) and Duisburg-Ruhrort (Lower Rhine).
  •  

    TABLE 1: NAVIGATIONAL PARAMETERS FOR IMPORTANT RHINE GAUGE STATIONS

    Gauge stationAreaEquivalent water level (EWL)Minimum navigation channel depth under the EWLUnder keel clearance
    Duisburg-RuhrortLower Rhine233 cm280 cm27 cm
    KaubMiddle Rhine78 cm190 cm32 cm

    Source: German Federal Waterways and Shipping Administration
     

  • The available draught for a vessel at a certain gauge station is calculated with the formula (Regarding the formula, see: SVS Aktuell, Dec. 2018/Jan. 2019, pages 7 and 8, available at: http://www.svs-ch.ch/sites/default/files/svs-aktuell/winter_2018.pdf):
    possible or available draught = minimum navigation channel depth + (actual water level – equivalent water level) – under keel clearance.
  • If the actual water level equals the equivalent water level (indicating that the water level is very low), the difference (actual water level – equivalent water level) will be zero. In this case, the possible draught of a vessel should still be equal to the minimum channel depth minus the under-keel clearance (see formula and drawing).
  •  

    FIGURE 1: ACTUAL WATER LEVEL, ACTUAL DRAUGHT, EQUIVALENT WATER LEVEL, MINIMUM NAVIGATION CHANNEL DEPTH AND POSSIBLE OR AVAILABLE DRAUGHT AT KAUB/ MIDDLE RHIN *


    Source: CCNR based on German Federal Institute of Hydrology (BfG, 2015)
    * The distances in this drawing are not at scale.
    In this illustration, the date chosen to determine the available or possible draught is 3 September 2020, when the actual water level was 239 cm on average).

     

  • For the following figures, daily water level data for Kaub and Ruhrort were collected in order to verify to which extent the minimum navigation channel depth was actually achieved (at which percentage of all days per year).
  •  

    FIGURE 2: AVAILABILITY OF DRAUGHT VALUES FOR THE MIDDLE RHINE AT KAUB (IN %)


    Sources: CCNR calculation based on data from the German Federal Waterways and Shipping Administration, provided by the German Federal Institute of Hydrology (BfG).
     

  • The minimum navigation channel depth of 1.90 m was achieved at Kaub:
    – In 2018: on 63.5% of all days per year
    – In 2019: on 98.3% of all days per year
    – In 2020: on 87.3% of all days per year
  • The fact that the ‘achievement rate’ in 2018 and 2020 was lower than the target rate of 95% reflects the occurrence of strong low water periods in both years.
  • Duisburg-Ruhrort at the Lower Rhine offers higher water levels, channel depths and possible draughts in general, due to different morphological characteristics of the Rhine at this point. This is reflected by a higher target depth (2.80 m), but it was only in 2019 that this target could be reached at a rate of at least 95%.
  •  

    FIGURE 3: AVAILABILITY OF DRAUGHT VALUES FOR THE LOWER RHINE AT DUISBURG-RUHRORT (IN %)


    Sources: CCNR calculation based on data from the German Federal Waterways and Shipping Administration, provided by the German Federal Institute of Hydrology (BfG).
     

  • Equivalent calculations can be carried out for the Danube. Two gauge stations on the Upper Danube in Austria are considered: Kienstock (122 km east of Linz and 90 km west of Vienna) and Wildungsmauer (250 km east of Linz and 38 km east of Vienna). The target depth for both stations is 2.50 m. The results of the data analysis show that Kienstock offered better navigational conditions than Wildungsmauer in 2018-2020.
  •  

    TABLE 2: NAVIGATIONAL PARAMETERS FOR IMPORTANT UPPER DANUBE GAUGE STATIONS

    Gauge stationAreaEquivalent water level (EWL)Minimum navigation channel depth under the EWLUnder keel clearance
    KienstockUpper Danube164 cm250 cm40 cm
    WildungsmauerUpper Danube162 cm250 cm40 cm

    Source: Via Donau and Federal State of Lower Austria
     

    FIGURE 4: AVAILABILITY OF DRAUGHT VALUES FOR THE UPPER DANUBE AT KIENSTOCK (IN %)


     

    FIGURE 5: AVAILABILITY OF DRAUGHT VALUES FOR THE UPPER DANUBE AT WILDUNGSMAUER (IN %)


    Source: CCNR calculation based on data from the Federal State of Lower Austria (https://www.noel.gv.at/wasserstand/#/de/Messstellen/Map/Wasserstand)
     
     

FREIGHT RATES IN THE RHINE REGION

  • Until October, gasoil and gasoline spot market freight rates on the Rhine remained rather low. In particular, full tanks and limited downstream refining activities – especially for motor fuels due to “lockdowns” – caused a significant drop of transport activity. Towards November and December 2020, higher seasonal demand for liquid cargo pushed freight rates up and this was supported by rapidly falling water levels.
  • In October, November and December 2020, gasoil freight rates were much lower than in the same months one year earlier. For the Lower Rhine, the average difference in Q4 2020 compared to Q4 2019 was -31%, and for the Upper Rhine even -33% and -29% for the Main. The percentage differences for gasoline were of the same order (-29%, -32%, -28%) (The figure for gasoline freight rates is not shown in the report, as it appears very similar to the graph for gasoil freight rates).
  •  

    FIGURE 6: FREIGHT RATE EVOLUTION FOR GASOIL FROM THE ARA REGION TO RHINE DESTINATIONS (INDEX 2015 = 100)


    Source: CCNR calculation based on PJK International
    * PJK collects freight rates (in Euro per tonne) for ARA-Rhine trade of liquid bulk. The CCNR transforms these values into an index with base year 2015. Lower Rhine: Duisburg, Cologne. Upper Rhine: Karlsruhe, Basel. Main: Frankfurt/M.

     

  • While the freight rates presented in the above figure relate to spot market rates for ARA-Rhine traffic, the IWT market also experiences more long-term transport prices, which are quite frequently observed in the market segments of chemicals and container transport. Such data are collected by the statistical office of the Netherlands (CBS) from a panel of Dutch IWT companies, together with spot market rates. The prices of established routes within the panel are observed twice a quarter and include fuel and low water surcharges.
  • Regarding the overall development of these data, a smaller ‘low water elasticity’ – or reactivity of transport prices toward low waters – is present (This can be verified by taking quarterly averages of the monthly ARA-Rhine index and comparing them with the quarterly index data from CBS. The average of the spot market rates for the ARA-Rhine index was around 300 in Q4 2018, while the highest value in the CBS index in this quarter was around 200). This is explained by the fact that the sailing regions of the barging companies in this CBS panel contain also regions other than the Rhine itself. In parts of the Netherlands, water level fluctuations are less pronounced than on the Rhine in Germany.
  •  

    FIGURE 7: FREIGHT RATE EVOLUTION PER QUARTER FOR DUTCH IWT COMPANIES ACCORDING TO MARKET SEGMENT (INDEX 2015 = 100)


    Source: Centraal Bureau voor de Statistiek (Binnenvaartdiensten; prijsindex)
     

  • For Q3 2020, the data show a decline of 12% of the overall index, compared to Q3 2019. The decrease was strongest for liquid bulk (-18%), although this was still a smaller decrease than the one observed for ARA-Rhine trade (see figures above). A different regional scope of the CBS index, as explained above, can be regarded as the underlaying cause. In Q1 2020 and Q2 2020, the drop of the liquid bulk index was only 7%.
  • In the first half year 2020, the strongest fall of the index can be observed for dry bulk spot market freight rates. The drop was thus -17% in Q1 2020 and -14% in Q2 2020 (compared to Q1 2019 and Q2 2019 respectively). In Q3 2020, dry bulk spot market rates fell by 10%.

 
 

COST EVOLUTION

    FUEL COSTS

  • Fuel costs are analysed on the basis of gasoil/diesel prices published by the energy price monitoring system of the Belgian Ministry of Economic Affairs (The data are received from ITB in Belgium. The prices are maximum prices and valid for a purchase volume of at least 2.000 litres of gasoil.). A comparison with oil prices reveals a very close correlation which serves as a basis for an outlook on fuel prices.
  • In the course of 2020, positive news about vaccines and their approaching availability brought oil prices back to higher levels. In December 2020, the Brent Spot market price once more reached a level of 50 US-dollars per barrel (= 41.1 euro, as the exchange rate USD/EUR was 1.217).
  •  

    FIGURE 8: AVERAGE FUEL PRICES ACCORDING TO THE BELGIAN MINISTRY OF ECONOMIC AFFAIRS AND BRENT CRUDE OIL PRICES INCLUDING FORECAST *


    Sources: ITB and SPF Economie (fuel price). US Energy Information Administration (oil price). Federal Reserve Economic Data (historical exchange rate US-dollar/euro). 1 barrel (bbl) = 159 litres
    * IMF = International Monetary Fund; EIA = US Energy Information Administration. The forecast assumes a nominal exchange rate of 1.22 US-$ per euro throughout 2021 and 2022.

     

  • Fuel prices in European IWT are not only influenced by oil prices but also by the exchange rate between US-dollar and euro. The depreciation of the US-dollar towards the euro, which started in March 2020, continued throughout the year 2020. This dampened fuel prices in European IWT (In December 2020, the exchange rate was 1.217 US-dollar per euro, compared to 1.126 US-dollar per euro in June 2020, and 1.110 US-dollar per euro in January 2020).
  • Arguments for a further depreciation of the dollar are put forward by some organisations, which see the US twin deficits as a striking argument for a further devaluation of the dollar (QCAM Monthly. 2021. Available at: (https://q-cam.com/wp-content/uploads/2021/02/QCAM-MONTHLY-February-2021.pdf) Last consulted 5.02.2021). Other observers (including OECD) put forward the very small interest differential between the two currency zones and therefore foresee a constant exchange rate in 2021 and 2022 (Raiffeisen Währungsupdate 2021. Available at: https://www.raiffeisen.ch/content/dam/www/rch/pdf/publikationen/waehrungsupdate/de/2021/waehrungsupdate-01-2021.pdf Last consulted 5.02.2021)(OECD. Nominal exchange rates against US dollar, average of daily rates. 2021. Available at: https://stats.oecd.org/Index.aspx?QueryId=51653# Last consulted 5.02.2021). For the present forecast, an exchange rate USD/EUR of 1.22 is assumed for the forecast horizon (2021 and 2022).
  • Regarding oil prices, in its latest short-term outlook from January 2021, the US Energy Information Administration (EIA) forecasts Brent crude oil spot prices to average around 52.7 US-dollars per barrel in 2021, and around 53.4 US-dollars per barrel in 2022, compared with an average of 41.8 US-dollars in 2020 (Source: https://www.eia.gov/outlooks/steo/. These values are transformed to values in euro and depicted in the figure. The assumed exchange rate for this transformation is 1.22 US-dollar per euro). The IMF oil price outlook points to similar values.
  • Based on the data and the reasoning explained, an increase in fuel costs of 7.2% is expected for 2021. This is slightly higher than the forecast within the Panteia cost monitoring (+4.7% in 2021).
  •  
    CAPITAL COSTS

  • Capital costs are dependent upon interest rates for long-term loans and the insured values of vessels. Interest rates decreased in 2020, as – in the wake of the economic crisis in the last years – short-term interest rates were consequently cut by the European Central Bank. In the medium and long term, lower short-term interest rates are passed on to lower long-term interest rates.
  • The development of interest rates in the recently published Panteia cost report (Source: Panteia (2021), Kostenontwikkeling binnenvaart 2020 en raming 2021, edited in January 2021) shows a decline over the last years. For 2021, capital costs are expected to decrease further, as interest rates will be kept very low, and insurance values of ships will decrease due to the crisis in the inland waterway transport sector. It should be noted that available interest rates do not include individual risk premiums, that could be added on top of the interest rates by banks, in order to cover higher individual risks of companies.
  •  
    LABOUR COSTS

  • An analysis of labour costs was carried out in the Panteia cost report, published in January 2021. Due to a deviation of actual wages from official wages, interviews amongst IWT companies were necessary. According to these interviews, labour costs increased in 2020 by 2.8% compared to 2019. Other sources used for the labour costs assessment were official salary tables published by the ‘Centraal Bureau voor de Rijn- en Binnenvaart’ (CBRB) in the Netherlands. For 2021, labour costs are assumed to increase further, as the Covid-19 crisis leads to higher burdens for manning vessels.
  •  
    INSURANCE COSTS

  • In 2020, insurance companies have increased insurance premiums by 3.3%. As the value of the insured vessels dropped by 0.4%, insurance costs increased by 2.9%. For 2021, insurance premiums are expected to continue their increase by 2.9%. A limited drop in the values of vessels by 0.4% will again lead to higher insurance costs for companies. The sources of these estimations are consultations with insurance companies and barging companies.
  •  
    REPAIR AND MAINTENANCE COSTS

  • On the basis of interviews with a panel of inland barging entrepreneurs, it is estimated that these types of costs increased in 2020 by 2.3% and will increase in 2021 by 2.0%.
  •  

    TABLE 3: DEVELOPMENT OF COSTS IN INLAND WATERWAY TRANSPORT (2020/2019) AND OUTLOOK FOR 2021

    Cost componentIndex 2020 (2019=100)Index 2021 (2020=100)
    Labour costs102.8102.3
    Capital costs
    - interest rates92.396.0
    - insured value of vessel99.699.6
    Fuel costs83.3104.7
    Repair and maintenance102.3102.0
    Insurance costs102.9102.4
    Other costs101.2101.3

    Source: Panteia (2021)
     
    SHARE OF LABOUR COSTS IN TOTAL COSTS AND IN TURNOVER

  • According to data from the statistical office of the Netherlands (CBS), the share of personnel costs within total costs in the Dutch IWT sector (freight and passenger transport) was 18.0% in 2018, 21.8% in 2017, and 23.0% in 2016. In the years 2009-2015, the share was 22.0% on average.
  • The share of personnel costs within net turnover was 15.3% in 2018, 18.3% in 2017 and 18.7% in 2016. In the years 2009-2015, the share was 18.8% on average.

• Transport performance (TKM) on inland waterways in the EU decreased by 8.1% in the first three quarters of 2020, compared to the same period in 2019.
• In the two largest IWT countries the decrease was -11.9% (Germany) and -6.8% (the Netherlands). In Danube countries, transport performance was 9% lower.
• Passenger transport (river cruises) recorded a reduction of passengers by 90-95%.

 
 

TRANSPORT PERFORMANCE IN EUROPE

    TRANSPORT PERFORMANCE IN IWT ON THE NATIONAL TERRITORY OF EACH COUNTRY IN EUROPE – COMPARISON BETWEEN Q1-Q3 2019 AND Q1-Q3 2020 (IN MILLION TKM)


    Sources: Eurostat [iww_go_qnave], OECD (Switzerland)
     

    FIGURE 1: INLAND WATERWAY TRANSPORT (IWT) PERFORMANCE IN EUROPE BY REGION (IN MILLION TKM)


    Sources: Eurostat [iww_go_qnave], Destatis
    * Danube = TKM in all Danube countries

     

  • Cargo related to steel production accounts for 25% of total Rhine transport. The decrease of steel production (Steel production in Germany amounted to 43.3 mio. tonnes in 2017, 42.4 million tonnes in 2018, 39.6 mio. tonnes in 2019 and 36.0 mio. tonnes in 2020. Source: World Steel Association and German ‘Wirtschaftsvereinigung Stahl’) due to a slowdown of the world economy in 2018-2019 and the Covid-19 crisis in 2020 resulted in less iron ore, coking coal and metal transport. This produces a considerable ‘downward momentum’ for the trend on the Rhine as well as on Dutch and German waterways. Coal that is used for energy generation (steam coal) accounts for 7%. By 2029, almost the entirety of steam coal transport will be phased out, due to the closure of coal fired power plants in Germany. For the Danube, a growth-orientated trend can be observed, which rests on a growing transport activity for agricultural products.
  •  
    RHINE AND AFFLUENTS

    FIGURES 2 AND 3: RHINE TRANSPORT VOLUME UPSTREAM AND DOWNSTREAM FOR MAJOR CARGO SEGMENTS (IN MILLION TONNES, FOR THE FIRST NINE MONTHS OF 2019 AND 2020)



    Source: CCNR analysis based on Destatis
     

  • Cargo transport on the traditional Rhine was 11% lower in the first nine months of 2020, compared to the same period in 2019. Within upstream transport, the figures show a decrease in the two-digit range for iron ore (-21%) and chemicals (-14%). Losses in both segments were due to a reduction in industry production. The upstream transport of petroleum products fell by 12% due to lockdowns and the related drop in demand for liquid fuels (gasoline, gasoil, kerosene, etc.). The reduction in coal transport (-30%) was partly caused by less steel production and partly by energy transition.
  • Downstream transport of sands, stones, gravel and building materials was reduced by 10%. Grain transport, with its relatively small share in total Rhine transport, increased its volume by 3%.
  •  

    FIGURE 4: TRANSPORT VOLUME ON RHINE AFFLUENTS


    Source: CCNR analysis based on Destatis
     

  • Cargo transport on the Main amounted to 11.7 million tonnes in Q1-Q3 2020 (-9% compared to Q1-Q3 2019). The overall trend on the Main fluctuates at around 4 million tonnes of cargo per quarter. Liquid cargo, foodstuffs, sands, stones and gravel are core segments in Main navigation.
  • The phasing out of coal weighs heavily on Moselle traffic and is the main reason for a decreasing trend.
  •  
    DANUBE

  • Between the Rhine and Danube, parallels emerge with respect to the development of industrial and non-industrial goods. Iron ore (-25%), coal (-30%) and metals (-17%) suffered with less production of steel.
  • For all cargo related to the agricultural sector, an increase was observed. The strength of this increase was most clearly visible for grain, where transport volumes more than tripled, and for food products and foodstuffs, where volumes more than doubled. Fertilizers registered more upstream (+17%) as well as more downstream (+50%) transport.
  • These data refer to the measurement point of Mohacs on the Middle Danube in southern Hungary, near the border with Croatia and Serbia. In total, 4.648 million tonnes of cargo crossed this border point in the first nine months of 2020. This was an increase of 7% compared to the same time period in 2019.
  •  

    FIGURES 5 AND 6: MIDDLE DANUBE TRANSPORT VOLUME UPSTREAM AND DOWNSTREAM FOR THE MAJOR CARGO SEGMENTS (IN MILLION TONNES, FOR THE FIRST NINE MONTHS OF 2020 AND 2019)*



    Source: Danube Commission Market Observation report
    * On the Middle Danube at Mohacs

     

  • Cargo transport on the Upper Danube in Germany, Austria and Slovakia decreased by 27% at the Austrian-German border and by 15% at the Slovakian-Hungarian border. The Lower Danube region (Romania, Bulgaria), which is presented by figures for the Danube-Black Sea Canal, lost only 5% in the first nine months. The Danube-Black Sea-Canal is the waterway connection between the port of Constanţa and the Black Sea.
  •  

    FIGURE 7: CARGO TRANSPORT ON THE DANUBE PER RIVER STRETCH *


    Source: Danube Commission Market Observation reports
    * DE/AT = German-Austrian border; SK/HU = Slovakian-Hungarian border; HU/CRO/SRB = border between Hungary. Croatia and Serbia (Mohacs)

 
 

PASSENGER TRANSPORT

  • Passenger transport on cruise ships on the Danube (At the time of writing, quarterly data on passenger transport were only available for the Danube) had reached record levels in 2019 but was interrupted completely in March 2020. Only in June did isolated trips resume both on the Upper and the Middle Danube. This revival took place on a very limited basis, in compliance with the restrictions on the number of passengers per voyage.
  • Passenger transport on day trip vessels – both regular liner services as well as non-scheduled excursion vessels – in the main tourist centres took place on a limited basis.
  •  

    FIGURE 8: PASSENGER TRANSPORT (RIVER CRUISE VESSELS) ON THE UPPER DANUBE (IN 1,000 PASSENGERS) *



    Source: Danube Commission Market Observation reports
    * Upper Danube = lock of Gabčikovo (border between Hungary and Slovakia)

     

    FIGURE 9: PASSENGER TRANSPORT (RIVER CRUISE VESSELS) ON THE MIDDLE DANUBE (IN 1,000 PASSENGERS)*



    Source: Danube Commission Market Observation reports
    * Middle Danube = measurement point of Mohacs in Hungary (border region with Croatia and Serbia). Figures indicate downstream traffic of passengers (in the direction of the Black Sea).

 
 

TRANSPORT VOLUME IN MAIN EUROPEAN IWT COUNTRIES

    FIGURE 10: INLAND WATERWAY TRANSPORT VOLUME IN MAIN EUROPEAN IWT COUNTRIES (QUARTERLY DATA OF TRANSPORT VOLUME ON THE NATIONAL TERRITORY OF EACH COUNTRY – IN MILLION TONNES)


    Source: Eurostat [iww_go_qnave]
    Due to a lack of plausibility of Stat.Bel data from Q1 2018 onwards, the data for Belgium from this quarter onwards were recalculated. This was done by applying the rate of change that is present in the more plausible data from the Flemish waterway administration (De Vlaamse Waterweg). The series for Belgium then follows the trend for Flanders, but is located on a higher level.

 
 

DRY BULK, LIQUID BULK AND CONTAINER TRANSPORT

    FIGURE 11: DRY CARGO TRANSPORT (IN MILLION TONNES)



     

    FIGURE 12: LIQUID CARGO TRANSPORT (IN MILLION TONNES)



     

    FIGURE 13: CONTAINER TRANSPORT (IN MILLION TONNES)



    Sources: Eurostat [IWW_GO_QCNAVE], Destatis. Centraal Bureau voor de Statistiek, De Vlaamse Waterweg, SPW Service Public de Wallonie, Voies Navigables de France, Romanian Institute of Statistics
    Note: for Belgium-Wallonia, infra-annual container statistics in tonnes are not available. The product group “machines/other goods” was assumed to consist mainly of container transport. The data contain total IWT on the territory of the country/region.