Unusually low water levels on the Rhine and Danube are affecting freight transport, creating operational challenges for parts of the energy sector, and adding pressure on several European industries. Although river conditions may gradually improve, the effects are likely to be felt across supply chains and industrial activity in the months ahead.
Key figures
- 8 cm: the Rhine's water level at Kaub reached just 8 cm on 18 August, below both the 78 cm navigation threshold and the previous record low of 25 cm recorded in 2018.
- 20%: at the beginning of August, some barges on the Rhine were operating with only around 20% of their usual carrying capacity.
- 72%: the Rhine (60%) and Danube (12%) together account for nearly three-quarters of inland waterway transport in Europe.
- Up to -0.4 points of growth: Germany's real GDP growth was reduced by an estimated 0.3 to 0.4 percentage points during the 2018 low-water period.
Pressure Builds on Key European Waterways
Europe has experienced several months of exceptionally warm and dry weather, resulting in significantly reduced river flows across the continent. The impact has been particularly noticeable on the Rhine and Danube, two waterways that play an important role in European trade and industrial activity. In early August, water levels on the Rhine fell to a new low at the Kaub measuring station in Germany, while sections of the Danube in Hungary and Romania also recorded unusually low levels.
While the environmental consequences are evident, the situation is also creating practical challenges for businesses. Reduced water levels are affecting freight movements, energy operations and industrial activities that depend on these transport corridors.
Transport Constraints Affect Supply Chains
Inland waterways represent a relatively small share of total freight transport in Europe but remain an essential part of the logistics network in several countries. In Germany, inland shipping accounts for 5.4% of freight transport, while in Romania the share reaches 19.2%.
Alternative transport options can help but are not always able to fully compensate. A river barge can transport almost 2,000 tonnes of cargo, compared with around 1,500 tonnes by freight train and approximately 25 tonnes by road tanker.
The effects are already visible in both transport capacity and logistics costs.
At the beginning of August, some vessels on the Rhine were able to carry only around 20% of their typical loads. Similar restrictions have been reported on parts of the Danube, where operators on the Romanian stretch of the river have reduced cargo volumes by up to 40%.
During the previous period of exceptionally low water levels in 2018, inland shipping costs increased significantly, rising by around 2.5 times for dry bulk goods and up to 4.5 times for liquid cargo due to loading restrictions and additional surcharges.
Additional Challenges for the Energy Sector
The effects of lower water levels extend beyond transport. The Danube provides cooling water for important nuclear power facilities in Central Europe. In Hungary and Romania, reduced river levels have affected operations at the Paks and Cernavodă nuclear power plants, which are significant contributors to their national electricity supply. These facilities account for approximately 40% of Hungary's electricity generation and 20.5% of Romania's.
To compensate for reduced output, operators may need to increase electricity imports or rely more heavily on gas-fired generation, both of which generally involve higher costs. While there is no immediate threat to energy security, the situation places additional pressure on regional electricity markets. In Romania, imported electricity can cost between two and two-and-a-half times more than domestically generated power.
Authorities in Hungary and Romania have also introduced temporary measures to curb electricity consumption among certain industrial users. Energy-intensive sectors such as chemicals, automotive manufacturing and construction materials are among the most affected, which may have an impact on industrial output in the short term.
Germany's Chemical Industry Faces Added Constraints
Germany's chemical sector is among the industries most closely linked to the Rhine and its transport network.
BASF's Ludwigshafen site illustrates this dependence. Located south of Kaub, approximately 40% of its freight is transported by inland waterway. Further declines in water levels could create additional challenges for connections with the ports of Amsterdam, Rotterdam and Antwerp, which are important gateways for supplies and exports.
These logistical pressures come at a time when the German chemical industry is already facing elevated energy costs and increasing competitive pressures, with production levels remaining significantly below those recorded in 2018.
A Growing Consideration for European Businesses
Current forecasts suggest only limited improvement in river conditions over the short term. On the Rhine, periods of low water levels typically continue until autumn, meaning disruptions may persist in the coming weeks. Looking ahead, declining snow cover, glacier retreat and more frequent heatwaves could increase the likelihood of similar events occurring in the future.
The situation highlights the importance of incorporating climate-related risks into logistics, industrial and energy planning. For companies that rely on inland waterways, the focus is increasingly shifting from managing isolated events to strengthening supply-chain resilience and improving operational flexibility.
The low water levels in the Rhine and the Danube show that extreme weather events are no longer just an environmental issue. They are becoming an economic factor capable of simultaneously affecting logistics, energy and industrial activity.
The current situation is all the more worrying as it has occurred earlier and with greater intensity than in 2018, against a backdrop of weaker European growth.
explains Eve Barré, economist at Coface.
