• Navigating conditions were more or less normal in the first six months of 2021. In July 2021, the Rhine was subject to floodings. In October and November 2021, both the Rhine and Danube experienced low waters.
• Fuel prices rose due to the steep increase in oil prices. Freight rates increased as well, but the trend was more positive in dry cargo and container transport, compared to liquid bulk transport.
- With regard to port operations, monthly data for waterside goods handling in the largest Upper Rhine ports indicate a small recovery trend that began in the second half of 2020 and continued throughout the year 2021. However, severe low waters in October and November 2021 rather interrupted this recovery.
- Regarding the hydraulicity aspect, figure 2 shows a scatter plot with data for the available draught at Kaub (x-axis) as well as freight volumes in million tonnes recorded at the lock of Iffezheim (y-axis). The values of available draught were calculated from water levels.2
- When available draughts fall below a certain threshold, navigation conditions become a bottleneck for freight transport. Examples are the low water period in October and November 2018, but also the more recent period in late 2021 (see left part of figure 2). For draught values above a certain threshold, the scatter plot does not show any relationship, except for the right-hand part of the diagramme, where high water levels tend to decrease freight transport.
- For the Danube, monthly data are available for the lock of Wildungsmauer near Vienna (January 2004 – November 2021). This lock is located in the eastern part of Austria where the country’s highest inland waterway freight transport is observed. A certain relationship between hydraulicity and freight transport can be observed in the scatter plot. Indeed, when the avaible draught is low, it seems that transport volumes are also reduced.
- For the Danube, the last quarter of 2021 was characterised by very low water levels and available draught values. The cargo losses in late 2021 can be explained by this. This confirms the information given in chapter 1.
FIGURE 1: WATERSIDE GOODS HANDLING IN MAIN UPPER RHINE PORTS (IN MILLION TONNES)
Source: CCNR analysis based on ports data
FIGURE 2: AVAILABLE DRAUGHT AT KAUB AND FREIGHT TRANSPORT PASSING THROUGH THE LOCK OF IFFEZHEIM ON THE UPPER RHINE (MONTHLY DATA M1/2004-M12/2021)
Source: CCNR calculation based on data from German Federal Waterways and Shipping Administration (WSV), provided by the Federal Institute of Hydrology (BfG)
FIGURE 3: AVAILABLE DRAUGHT AT WILDUNGSMAUER AND FREIGHT TRANSPORT ON THE DANUBE IN AUSTRIA (MONTHLY DATA M1/2004-M11/2021)
Source: CCNR analysis based on data from viadonau and Statistics Austria
FREIGHT RATES IN THE RHINE REGION3
- Within ARA-Rhine trade, spot market freight rates for transporting gasoil followed an increasing trend starting in the third quarter of 2021 and reaching a peak in November 2021. This is mainly due to the low water periods in October and November 2021.
- Statistics Netherlands (CBS) collects freight rate data from a panel of Dutch IWT companies. These data are observed twice quarterly and include fuel and low water surcharges.
- Transport prices for dry bulk followed an upward trend starting after the third quarter 2020. Container transport freight rates remained on a positive string from the second quarter of 2020 onwards. For liquid cargo, transport prices remained at a low level with a further decline in the third quarter 2021.
- Transport demand for liquid products increased in the Netherlands, but not in neighbouring countries. This explains the situation for liquid cargo freight rates for Dutch barging companies, as their operational areas also include other countries.
FIGURE 4: 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.
FIGURE 5: FREIGHT RATE EVOLUTION PER QUARTER FOR DUTCH IWT COMPANIES ACCORDING TO MARKET SEGMENT (INDEX 2015 = 100, QUARTERLY DATA)
Source: Centraal Bureau voor de Statistiek (Binnenvaartdiensten; prijsindex)
FUEL COST EVOLUTION
- 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.4 A comparison with oil prices reveals a very close correlation which serves as a basis for an outlook on fuel prices.
- In the second half of 2021, oil prices – and therefore also fuel prices – continued to follow an increasing trend. In the fourth quarter of 2021 they stood at US$79,6 (approximately 69.8 Euro as the exchange rate was USD/EUR 1.17).
- In its latest short-term outlook of January 2022, the US Energy Information Administration (EIA) forecasts Brent crude oil spot prices to average around 75 US dollars per barrel in 2022, and around 67.5 US dollars per barrel in 2023. This originates in assumptions of the pandemic and economic uptake as well as on OPEC agreements to curb supply caps up to September 2022.56 Due to political circumstances, they passed the mark of US$100 by the beginning of March 2022. In case of a prolongation of the political conflict in Ukraine, oil and energy prices are expected to rise further on a steep path.
- Fuel prices in European IWT are impacted by both oil prices and the exchange rate between US dollar and the Euro. The very steep escalation of the US national debt limits any appreciation potential of the US dollar towards the Euro throughout 2022.7 The depreciation of the Euro in relation to the US dollar, starting in May 2021 from 1.22 to 1.13 by December 2021, increased fuel prices in European IWT.8
- Based on this reasoning, fuel prices in IWT are expected to peak in 2022 and afterwards decline in 2023.
FIGURE 6: 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.
* EIA = US Energy Information Administration. The forecast assumes a nominal exchange rate of 1.12 US dollars per Euro throughout 2022 and 2023. The forecast does not consider the impact of the war in Ukraine.