Short-term climate impacts permanently change waterway supply chains – report
Clean Energy Wire
Even temporary impacts of climate change – like low water levels on key shipping routes – can lead to lasting shifts in supply chains, shows a report by RETHINK-GSC, a joint project from Aarhus University and the Kiel Institute for the World Economy (IfW). During the severe low water period of 2018, German firms’ exports along inland waterways fell by almost 20 percent, said the researchers. Even after water levels returned to normal, firms continued to avoid inland shipping, switching to rail and road instead.
This was particularly true for firms transporting time-sensitive goods, like chemicals or fresh foods. Firms with the fewest logistic alternatives to waterway transport were hit the hardest by low water levels.
“Even temporary disruptions can have lasting effects on firms’ sourcing strategies,” said Saskia Meuchelböck, lead author of the report and researcher at Aarhus University. “The assumption that companies simply return to business as usual once conditions normalise does not hold in practice,” she added.
Inland waterways are key routes through which bulk commodities are transported, like coal, chemicals or ores. The researchers analysed German import and export data from 2017-2019, either side of unprecedented low water levels across the country in 2018. They also found that firms that were reliant on waterways for imports saw their exports drop by four percent, regardless of how the exports were transported.
Germany experienced trade disruptions from very low water levels in 2018 and 2022, events that have been made more likely as climate change shifts precipitation patterns across the country. A previous analysis from IfW found that in a month with 30 days of low water, industrial production in Germany declines by about one percent. “Transport infrastructure is a critical but fragile backbone of our supply chains,” Meuchelböck said. “As climate change reshapes operating conditions, resilience will require not just supplier diversification but also diversification across transport modes.”
Countries along Europe’s most important inland waterway for trade, the Rhine, agreed in 2020 to do more to mitigate the impacts of low water levels. Some firms are otherwise attempting to adapt to lower water levels, like the German chemical giant, which has deployed river freight vessels designed to cope with low water levels on the Rhine. Barges are among the most climate-friendly and energy efficient forms of transport, and while Europe aims to get more freight onto its rivers and canals, they struggle to navigate shallow waters.
