• 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).
- 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.
- 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.
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: ACHIEVEMENT OF MINIMUM NAVIGATION CHANNEL DEPTH AS AVAILABLE DRAUGHT IN 2018-2020 (IN % OF ALL DAYS PER YEAR)
|Gauge station||Minimum navigation channel depth under the EWL*||2018||2019||2020|
|Kaub (Middle Rhine)||190cm||63.5%||98.3%||87.3%|
|Duisburg Ruhrort (Lower Rhine)||280cm||62.3%||95.3%||83.6%|
|Kienstock (Upper Danube)||250cm||50.4%||63.3%||57.4%|
|Wildungsmauer (Upper Danube)||250cm||43.3%||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
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.
- 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.
- 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 2: PANTEIA FREIGHT RATE INDEX FOR DRY CARGO TRANSPORT IN THE RHINE AREA (INDEX 2015 = 100)
FIGURE 3: PANTEIA FREIGHT RATE INDEX FOR DRY CARGO TRANSPORT ACORDING TO GOODS SEGMENT (INDEX 2015 = 100)
LIQUID CARGO FREIGHT RATES IN THE RHINE REGION
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