Rhine shipping crisis hits German PU supply chain as Covestro cuts output

The river’s gauge at Kaub, a major shipping bottleneck between Ludwigshafen and Cologne, fell to 20 cm on August 5 – 5 cm below the previous record set in 2018. Germany’s Federal Association of Inland Shipping has warned that the reading could fall into single figures because of the continuing lack of rainfall.

Jens Schwanen, managing director of the association, told Reuters: “In principle, the Rhine is then no longer navigable along its entire length and thus split in two.”

Shipping could continue between Amsterdam, Rotterdam and Antwerp and the northern section of the German Rhine, as well as on southern tributaries and canals. However, vessels would be unable to pass through the Kaub bottleneck, separating the northern ports from industrial sites further south.

The disruption is particularly significant for the chemical and polyurethane industries. The Rhine connects the ports of Rotterdam and Antwerp with the Lower Rhine and Cologne chemical clusters and BASF’s Ludwigshafen complex. Chemicals account for around 11% of commodity traffic on the waterway.
Covestro has reduced production at its Lower Rhine sites as restricted barge capacity limits raw-material deliveries. It is using vessels carrying reduced loads, increasing the frequency of sailings and transferring some freight to alternative transport routes.

The company has not disclosed the products or volumes affected. It had not publicly announced a new force majeure at the time of publication, but uncorroborated reports suggest this to be the case.

Covestro said more than 75% of the raw materials used by its European operations and over 30% of its finished products are transported on the Rhine. A 1,500-metric-ton barge carries approximately the same load as 60 trucks.
“We also began building up raw material inventories several weeks ago as a precaution,” a Covestro spokesperson said.

The company’s Dormagen site manufactures polyurethane raw materials including polyether polyols and TDI. Its world-scale TDI plant has a stated annual capacity of 300,000 metric tons. Covestro has not said whether those operations are among the units currently running at reduced rates.

Other suppliers have so far been able to maintain production. Evonik said its German sites were operating normally, although it is moving some freight to road and rail and operating partly loaded vessels. Ineos said it had maintained production capacity at Cologne through alternative transport arrangements and supplies from other European sites.

BASF has declared force majeure on several surfactants because of raw-material shortages, although it has not announced a corresponding interruption to polyurethane raw materials. During the previous record low-water period in 2018, Rhine transport problems contributed to the shutdown of its TDI plant at Ludwigshafen.

The German Chemical Industry Association warned that contingency measures cannot fully replace river transport.

Wolfgang Große Entrup, the association’s chief executive, said: “When ships can carry less cargo or are unable to operate at all, costs rise, supply chains come under pressure, and production is curtailed.”

North Rhine-Westphalia, Lower Saxony, Rhineland-Palatinate and Saarland have temporarily relaxed restrictions on Sunday and public-holiday truck movements to help companies transfer freight from barges to roads.

However, the industry’s ability to use rail is also constrained by major engineering work on the line along the Rhine’s eastern bank between Cologne and the Rhine-Main region.