• The year 2022 was characterised by less favourable navigating conditions for both the Rhine and the Danube when compared to the year 2021 because of the extreme heat and a period of rapidly decreasing water levels in July and August 2022. This had a negative impact on cargo volumes transported on both waterways.
• Between 2015 and 2022, 2018 was the year that experienced the highest number of days with extremely low draught values both on the Rhine and the Danube.
• In 2022, freight rates in the Rhine region increased on average by +42.5% for all market segments compared to 2021 and were strongly impacted by the low water period. Dry cargo is the cargo segment for which freight rates increased the most. Beyond the low water effects, this results from the boom in coal transport and the transfer of Rhine capacities to the Danube.
WATER LEVELS, AVAILABLE DRAUGHTS AND NAVIGATION CONDITIONS
- The overall performance of inland waterway transport is linked to, among other factors, water levels, which determine the amount of cargo that a vessel can load and transport under safe navigation conditions. The load factor (ratio of cargo loaded to loading capacity of the vessel) influences the profitability of inland waterway transport. A high load factor represents a high volume of cargo transported per trip, and therefore a high level of revenue for a vessel, for any level of fixed costs. In addition, high water depths and the resulting high load factors enable inland waterway transport to reach a high degree of energy efficiency.
- Low water periods therefore reduce not only the load factor and overall cargo transport on inland waterways but lead also to higher costs. Although the reduction of the load factor could be compensated by putting more vessels into operation, there are obvious limitations to this.22 An example is the low water period in both autumn 2018 and summer 2022 on the Rhine. The amount of cargo that a vessel can load at a certain water level, while keeping safe navigation conditions, is determined by the available draught, as can be seen in the next figure.
- One way of assessing the impact of low water periods on inland waterway transport is to look at the statistical frequencies of available draught23 values for different years. In the following graph, this statistical frequency is measured in the unit ‘number of days’ and calculated for intervals of available draught values.
- The frequency distribution clearly shows that the year 2022 was characterised by less favourable navigating conditions when compared to the years 2021 or 2019. Indeed, compared to 2019, the peaks in the 2022 frequency distribution are ‘shifted’ to the left. The year 2018 however experienced a higher number of days with extremely low draught values, in the area below 1.80 m. The year 2021 was again different, as it contained several days with high water levels, resulting in a rather high frequency of days with a draught > 3.80 m.24
- Another method for assessing the quality of navigating conditions over an entire year is based on the concept of counting the number of days when water levels are below a certain reference low water level, known as Equivalent Water Level (EWL) for the free-flowing sections of the Rhine and Low Navigable Water Level (LNWL) for the Danube. If water levels drop below this reference low water level, this indicates a situation of critical navigation.
FIGURE 1: ACTUAL WATER LEVEL, ACTUAL DRAUGHT, EQUIVALENT WATER LEVEL MINIMUM NAVIGATION CHANNEL DEPTH AND POSSIBLE OR AVAILABLE DRAUGHT AT KAUB/MIDDLE RHINE *
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 a sailing vessel, the actual draught also contains the squat effect. The latter results from hydrodynamic effects and leads to a higher draught compared to a vessel at rest. The squat effect is stronger the less water there is under the keel, and the faster the vessel is sailing.
FIGURE 2: STATISTICAL FREQUENCY DISTRIBUTION OF AVAILABLE DRAUGHT VALUES AT KAUB ON THE MIDDLE RHINE PER YEAR (IN NUMBER OF DAYS)
Source: CCNR calculation based on data provided by the German Federal Waterways and Shipping Administration (WSV), provided by the German Federal Institute for Hydrology (BfG)
NUMBER OF CRITICAL LOW WATER DAYS FOR RHINE AND DANUBE GAUGE STATIONS
- The EWL is determined by the Central Commission for the Navigation of the Rhine (CCNR) for several gauge stations along the Rhine. The values are adapted every ten years, to take account of natural and anthropogenic changes.
- The equivalent water level 2012 came into force in 2014 and retained its validity until the end of 2022. A new equivalent water level was introduced on 1 January 2023 and is applicable until the end of 2031.
- Although the equivalent water level is measured in centimetres, the starting point of its determination is a flow concept. Indeed, equivalent flow values (indicated in the unit m3/s) measured against the benchmark levels are recalculated every ten years as flows within a 100-year time series. The equivalent flow values are then used to recalculate the corresponding equivalent water level (EWL) values against the benchmark levels every ten years. The EWL consequently contains the following definition: “The equivalent water level (EWL) is the water level occurring along the Rhine at an equivalent water flow falling below the long-term average for 20 days [per year]”.
- For these eleven Rhine gauges, daily water level data were collected and analysed.
- The figures show the number of days below the equivalent water level for the above-mentioned gauge stations.
- Between 2015 and 2022, the two years with the highest number of low water days were 2018 and 2022. Although the summer of 2022 experienced days of extreme heat and a period of rapidly decreasing water levels, the 2022 low water period did not last as long (from July to August 2022) as it did in 2018 (from August to November 2018). This explains the smaller number of days below the equivalent water level in 2022, compared to the year 2018.
- For Kaub, on the Middle Rhine, data on the number of days with a discharge of less than 783 m3 per second (which is the equivalent flow value, corresponding to the equivalent water level of 78 cm at Kaub) are modelled statistically dating back to the year 1820. The aim of this procedure is to compare today’s flows with the past. The resulting values show that years of severe low water periods also occurred in the past. However, their impact on transport volumes was not as strong as in 2018 and 2022, due to smaller vessels with a lower draught, different logistics (less ‘Just-in-time’) and less competition from other transport modes.
- The reference low water level of the Danube is known as ‘Low Navigable Water Level (LNWL)’. It is defined as the water level exceeded on 94.0% of days in a year (i.e. on 343 days) during ice-free periods with a reference to a 30-year observation period (1981 – 2010).25
- Based on this definition, equivalent calculations can be carried out for the Danube.
- Danube navigation also suffered from a low water situation which started at the end of June 2022 and lasted until August the same year. During this period, on certain critical sections of the river, some convoys were stopped, sometimes for long periods. This had a negative impact on cargo volumes transported on the Danube.
- For nine important gauge stations on the Danube, daily water level data were collected and analysed. The figures below show the number of days per year on which the actual water levels fell below the Low Navigable Water level.
RHINE GAUGE STATIONS
TABLE 1: HYDRAULIC PARAMETERS FOR IMPORTANT RHINE GAUGE STATIONS *
| Gauge station | Guaranteed navigation channel depth | Equivalent water level 2012 |
|---|---|---|
| Tiel (Waal, NL) | 280 cm | 258 cm |
| Nijmegen (Waal, NL) | 280 cm | 523 cm |
| IJsselkop (Nederrijn, NL) | 280 cm | 694 cm |
| Lobith (Lower Rhine, NL) | 280 cm | 739 cm |
| Emmerich (Lower Rhine, DE) | 280 cm | 84 cm |
| Duisburg-Ruhrort (Lower Rhine, DE) | 280 cm | 233 cm |
| Cologne (Lower Rhine, DE) | 250 cm | 139 cm |
| Kaub (Middle Rhine, DE) | 190 cm | 78 cm |
| Oestrich (Middle Rhine, DE) | 190 cm | 87 cm |
| Maxau (Upper Rhine, DE) | 210 cm | 369 cm |
| Basel (Upper Rhine, CH) | 300 cm | 499 cm |
Sources: German Federal Waterways and Shipping Administration (WSV), Rijkswaterstaat
* Waal and Nederrijn are two branches of the Rhine delta in the Netherlands.
NUMBER OF DAYS BELOW THE EQUIVALENT WATER LEVEL (EWL)
Sources: CCNR calculation based on data from the German Federal Waterways and Shipping Administration (WSV), provided by the German Federal Office for Hydrology (BfG), and from Rijkswaterstaat
Low water levels from a historical perspective
FIGURE 3: NUMBER OF DAYS PER YEAR WITH A DISCHARGE Q < 783 M3/S AT KAUB, MIDDLE RHINE INCLUDING 30-YEARS-MOVING AVERAGE *
Source: German Federal Office for Hydrology (BfG)
* Corresponds to a water level of 78 cm (equivalent water level).
DANUBE GAUGE STATIONS
NUMBER OF DAYS BELOW THE LOW NAVIGABLE WATER LEVEL (LNWL)
Sources: CCNR calculation based on data from the German Federal Waterways and Shipping Administration (WSV), provided by the German Federal Office for Hydrology (BfG), data from the
Federal State of Lower Austria and the Danube Commission
FREIGHT RATES IN THE RHINE REGION
- Statistics Netherlands (CBS) collects freight rate data from a panel of Dutch IWT companies. The price levels are based on fixed routes for which questionnaires are sent out twice a quarter. They comprise the sailing costs including fuel and low water surcharges and exclude cargo handling costs. In 2022, considering all market segments together, freight rates increased on average by +42.5% compared to 2021.
- More specifically, dry bulk and container freight rates have been following an increasing path since the third quarter of 2020, as the underlying transport demand recovered from the pandemic. Dry cargo is the cargo segment for which freight rates increased the most. This development can be explained by several factors, in particular booming coal transport, the transfer of vessel capacity from the Rhine to the Danube region and low water effects.
- On the contrary, liquid cargo freight rates have been following a decreasing trend since 2019. This stems from a weaker development of transport demand compared to dry cargo, both during and after the pandemic.26 Also, the liquid cargo segment experienced a stronger expansion of its supply side, in terms of a higher newbuilding rate and thus more additional cargo carrying capacity. This changed the supply-demand-relationship and put transport prices under pressure. However, despite these trends, liquid cargo freight rates also attained an increase in 2021 and 2022. The main reason for this escape from the downward trend is the low water period in both years.
- Figure 5 illustrates the liquid cargo spot market freight rate index for gasoil for ARA-Rhine transport (yearly averages). Since 2010 an overall positive trend is seen. To some extent, this positive trend was driven by low water periods, which occurred in 2011, 2015, 2018 and 2022.
- The observed trends are almost identical for the three different geographical entities shown – two stretches of the Rhine (Lower Rhine, Upper Rhine) and the Main affluent.
CBS FREIGHT RATE INDEX FOR THE RHINE REGION
FIGURE 4: CBS FREIGHT RATE INDICES PER QUARTER (2015 = 100) *
Source: CBS, Table 84050NED
LIQUID CARGO FREIGHT RATES IN THE RHINE REGION
FIGURE 5: PJK FREIGHT RATE INDEX FOR LIQUID CARGO TRANSPORT IN THE ARA-RHINE AREA (2015 = 100)
Source: CCNR calculation based on PJK International
CITBO LIQUID CARGO FREIGHT RATE INDEX FOR THE FARAG REGION
-
Geography of the CITBO transport activity and product segment structure
- For the liquid cargo transport within the extended ARA region, between Amsterdam, Antwerp, Flushing, Ghent, Rotterdam and Terneuzen, a dataset on spot market freight rates provided by the tanker barge cooperation CITBO27 was analysed. The shares of the different product groups within cargo transported were as follows:
– Gasoil and components: share of 38% in 2022 (41% in 2021)
– Gasoline and components: share of 29% in 2022 (24% in 2021)
– Biodiesel: share of 26% in 2022 (28% in 2021)
– Chemicals: share of 6% in 2022 (5% in 2021)
– Heavy and other products: share of 1% in 2022 (3% in 2021). - Of all liquid cargo transport in 2022, the five ports with the highest shares are represented as follows:
– in loaded cargo, volumes accounted for 81% and,
– in unloaded cargo, volumes accounted for 66%. - The locations of other ports of loading and unloading are mainly found in Belgium and in the Netherlands, but locations in France, Germany and Switzerland also appear.
- A freight rate index was calculated for the four main different product segments.28 From these indices, it can be observed that low waters (in 2018 and 2022) had a strong influence on freight rates for all product segments.
- Taking into consideration the entire period between Q3 2017 and Q1 2023, freight rates were quite stable for chemicals and gasoline and components, except during periods of low water. For gasoil and components, as well as for biodiesel, the general trend was more orientated downwards, again except during periods of low water.
- The longest journey time observed is for the transport of gasoline. In 2022, the average duration of trips was 24.5 hours for gasoline and components, compared to 17.4 hours for gasoil and components, 16.5 hours for chemicals and 16.4 hours for biodiesel. Longer journey time leads to higher costs, thereby contributing to higher freight rates.
- The strong influence the journey time for trips has on the level of freight rates is confirmed in Figures 10 and 11. The correlation between these two indicators is not perfect – however, outliers can be explained by low water periods. As an example, the three outlier points in the figure on gasoline and components (with freight rate index values above 250) represent three months in late 2018.
- Additional influencing factors for freight rates exist. Overall, it can be observed that chemicals have by far the highest spot market freight rates in absolute terms (€/tonne), followed by gasoline and its components. The high freight rate levels for chemical transports cannot be explained by journey times, as these are rather low for chemicals. The high freight rates can be attributed primarily to the relatively expensive ships, often with stainless steel tanks, as well as the high safety standards and high cleaning costs. The important demand on the shippers’ side to transport their chemicals by IWW therefore contributes to higher freight rate levels for chemical products within the CITBO database.
| Port of loading | Cargo volume - share in % | Port of unloading | Cargo volume - share in % |
|---|---|---|---|
| Antwerp | 35% (in 2021: 34%) | Rotterdam | 28% (in 2021: 24%) |
| Rotterdam | 27% (in 2021: 32%) | Antwerp | 17% (in 2021: 29%) |
| Amsterdam | 8% (in 2021: 9%) | Amsterdam | 12% (in 2021: 14%) |
| Flushing | 6% (in 2021: 8%) | Ghent | 6% (in 2021: 6%) |
| Ghent | 5% (in 2021: 5%) | Dunkirk | 4% (in 2021: 4%) |
| All other ports | 19% (in 2021: 24%) | All other ports | 34% (in 2021: 23%) |
Results of the calculation of freight rate indices
FIGURES 6, 7, 8 AND 9: CITBO FREIGHT RATE INDEX FOR LIQUID CARGO SEGMENTS (INDEX Q3 2017 = 100)
Source: CCNR analysis based on spot market data provided by CITBO
Influencing factors for CITBO freight rates
FIGURES 10 AND 11: RELATIONSHIP BETWEEN JOURNEY TIME OF A TRIP AND FREIGHT RATE INDEX VALUE (INDEX Q3 2017 = 100) *
Source: CCNR analysis based on spot market data provided by CITBO
* The dots in the graphs represent the combination of average journey time and average freight rate index for a certain month.
