High temperature baking European supply chain

A few days ago, the European Union said that Europe was experiencing the worst drought in 500 years. EU spokesman balke said that Europe experienced the worst drought since 1540 in 2018, and the current data show that the drought this year may be more serious than that in 2018. The World Meteorological Organization (WMO) said recently that the past July was the highest temperature in the world since records. Some parts of Europe were affected by heat waves for a long time, and the high temperature in Europe in August continued.
The drought in Europe, which is not seen in 500 years, has affected the water level of most rivers in the region. On August 15, the water level of the Rhine River dropped to a new record low. In emerich, Germany near the Dutch border, the water level of the Rhine River reached a new low of 2 cm. On the 15th, the water level in koub Town, Germany was 32 cm; The previous day, the water level was still 40 cm. When the ship is fully loaded, the water level needs to reach at least 1.5 meters. Not only the Rhine River, but also the Po River in Italy, the Loire River in France, and the Thames River in Britain have suffered serious drops. For example, the flow of the Loire River in France is less than 1 / 20 of the previous average level. According to the Rhine channel and shipping administration, in the next 3-5 days, the water level in the lower reaches of the Rhine may further drop by 5-10 cm, while the water level in the middle reaches of the Rhine will remain relatively stable. Lilith, a German environmental technician, said that the water level of the Rhine River has dropped to the critical point where navigation is almost cut off. "The high temperature has dried up the water.".
As the largest river in Western Europe, the Rhine River originates from the northern foothills of the Alps in Switzerland, flows through Liechtenstein, Austria, France, Germany and the Netherlands in the northwest, and finally flows into the North Sea near Rotterdam, the Netherlands. It flows through many world-famous industrial bases and plays an important role in the economic development of coastal countries. It is one of the busiest rivers in the world.
Now, with the continuous decline of the water level of the Rhine River, European shipping has been seriously impacted, leading to a sharp decline in the transport capacity and efficiency of the European supply chain. Even due to the drop of water level, some key sections of the Rhine River could not be normally navigable a few days ago, hindering the circulation of large goods such as diesel and coal. In addition, the falling water level of the Danube River has also hindered the trade of food and other goods. Half of Ukraine's agricultural products need to be exported through the Danube port. A spokesman for Duisburg, the largest inland port in Europe, said that "ships can only carry fewer goods, which further aggravates the current supply chain problems in Europe, forcing enterprises that rely on water transport of coal, gasoline and other goods to limit their production capacity, and increasing the risk of the European economy.". It is reported that due to the drought, chemical manufacturers relying on the Rhine channel are increasingly facing the problem of declining shipping capacity, which has destroyed the distribution logistics of imported raw materials and exported products.
According to the data of Eurostat, the rivers and canals in the European continent, as a mode of transportation, contribute about US $80 billion to the regional economy every year. Therefore, the consequences of the waterway drying up this time are very serious. According to the data of the research department of Deutsche Bank, the drought occurred in 2018, and the water level of the kaub section of the Rhine River fell to a historical low, resulting in a decrease of 0.2% in Germany's gross domestic product (GDP). Albert Jan swart, transport economist of ABN AMRO Bank, predicted that the current high temperature weather will affect the economy of the whole region, and the losses will far exceed the 5 billion euros (about US $5.1 billion) loss caused by the disconnection of the Rhine River in 2018.
In addition, recently, contargo, the main container operator in Germany, confirmed that the minimum water level for inland ships in the middle of the Rhine River is between 30cm and 35cm, and predicted that the water level would continue to drop. Contargo said that "for the sake of safety, we will basically stop sailing in the middle and upper reaches of the Rhine River" and "according to the general terms and conditions, we are no longer obliged to transport". It is reported that although the transportation of goods on the Rhine River is still continuing, the ships are forced to empty 3 / 4 of the time, and the users need to spend four ships instead of one to transport goods. "The transportation capacity of barges only accounts for 20% ~ 30% of the total transportation capacity, which causes a backlog of goods. In the next drought period, users will switch from barges to trucks, and the freight rate will be increased by at least 25%.". However, market participants seeking alternative modes of transportation also face difficulties. "Due to the lack of drivers and summer holidays, coupled with rising freight rates, the supply of trucks is also very short.". Moreover, some goods cannot be transported by water to land due to their commodity nature or packaging specifications. For example, dangerous goods cannot be easily transferred from barges to railways or highways, and some goods must be transported by large bulk carriers. One trader said, "this will have an impact on the cost of goods and the stable operation of the supply chain, so it may cause a heavy blow to the relevant industries.".
On August 16, European metal market traders were paying close attention to the abnormally low water level of the Rhine River. The transportation department warned that the restricted barge transportation has affected the logistics of some products, and is worried that if the situation is not alleviated as soon as possible, the impact may further spread. John kartsonas, managing partner of the consulting firm breakwave advisors, said: "the low water level of the Rhine River may represent another interruption of the supply chain, because it is closely related to the transportation of bulk commodities and fuels." if this situation continues, the coal and fuel stocks at the plant level may be exhausted, and the stocks at the main ports may increase, resulting in large ocean going ships having to wait longer. ".
Since the beginning of this year, Europe's supply chain has been strained due to the conflict between Russia and Ukraine, energy shortage, strikes of transport workers and other factors. Now, it has been tested by extreme high temperatures, and the European supply chain has further sounded the alarm.