Drought Cripples European Waterways, Hitting Swiss Imports

Water scarcity is hitting European economies hard as a prolonged drought grips the continent and Switzerland. The Rhine, Europe's most crucial waterway, has reached record low levels in some areas, severely impacting the transport of goods. Ships can carry significantly less cargo, forcing companies to use more vessels for the same amount of freight, driving costs up by three to four times.

This situation poses a major challenge for industries that depend on river transport for raw materials and intermediate products like fuel, chemicals, and steel. Germany's Kiel Institute for the World Economy forecasts a potential loss of 1 to 2 billion euros in value creation for the country in the third quarter. Similar issues are affecting the Danube in Romania and Slovakia.

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The situation has significantly worsened in recent days. While cargo ships are still able to pass, their numbers and load capacity are greatly reduced.

For Switzerland, the Rhine is a vital artery, handling approximately 10% of its imports. In Basel, the Swiss Rhine Ports report that cargo ships can currently only operate at 15% to 30% of their normal capacity. Many shipping companies are finding the routes unprofitable, leading some to suspend services. While shifting to rail and road transport is an option, it is considerably more expensive, causing companies to delay shipments of non-essential goods.

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Due to the very low transportable quantities, the route is hardly profitable for many companies.