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Low river levels, overbooked railways, truck driver shortage wreak havoc on German logistics

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Low river levels, overbooked railways, truck driver shortage wreak havoc on German logistics

December 13, 2018 - 06:11
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BRUSSELS, Dec. 13, 2018 (PPI Europe) -“Logistics is becoming more and more of an issue in Germany.” This quote from a paper market commentator summarizes well the feeling among the business community in Germany as transporting goods within the country grows more and more difficult for a variety of reasons.

Shipping has come under increasing pressure in 2018 as the water levels of canals and rivers in Germany have been very low throughout half the year because of low rainfall. As a consequence, vessels have only been able to transport one third of their actual capacity, while the remainder has had to be transferred to an already overbooked rail network. “It’s been a difficult year for shipping companies in Cologne because the Rhine has had very low water levels for a long time, so vessels have not been able to ship all the goods [they normally do] and they could carry only one third of their actual capacity. As a result, companies have had to send more vessels,” a spokesperson at the Port of Cologne HGK commented. He added: “During the last 10 days it rained in the south, so the situation has improved compared to the summer or beginning of autumn. But it’s still not the same as before, when low water levels normally lasted for just one or two weeks per year. The low-water situation this year started back in May.”

According to the Federal Association of German Inland Navigation (BDB), “the section between Mainz / Wiesbaden and St. Goar on the middle Rhine is currently a bottleneck for inland waterway transport on Europe’s most important waterway. This is because the approved waterway depth in this area is 1.90 meters only.” The association added: “Thus, the transport capacity of the passing ships has been significantly reduced on many days of the year – on the entire route of the ship from the starting point to the destination.”

Difficulties in shipping caused a scarcity of fuel in October and, according to the international press, the German government was forced to use part of its fuel reserves to ease the situation.

The fuel shortage hit the trucking segment, which is already under pressure because of a lack of truck drivers. On top of that, the growing importance of the e-commerce market, especially in the run-up to the Christmas season, and the fact that many companies want to make their deliveries before Christmas, is making delivery by truck even more difficult. “Fuel prices are going up because ships cannot transport fuel. Plus, there are not enough truck drivers,” one market commentator said. “There is a shortage of truck drivers in the market, because many are and will be leaving the business without any replacements. That is why we have to adapt our business from the planning point of view,” another one added.

Because of these logistics issues, some paper mills in central Europe are considering taking some downtime in order to try to ease the situation. “It is difficult to get enough trains and trucks around Christmas time. There is a lot of construction work and, because of the spike in e-commerce, there are a lot of goods being transported. The water level on the Rhine river is low, so cargo capacity cannot be filled. Plus, a lot of companies want to deliver before Christmas. Therefore, we will probably take a maintenance shut in December,” one papermaker said.

In order to find a solution to the shipping problem, BDB is pushing the government to improve the waterway network. “BDB demands that inland waterway transport projects listed in the Federal Transport Infrastructure Plan (BVWP) 2030 and the Waterways Development Act be tackled as quickly as possible. This also applies to refurbishment measures not anchored in the BVWP,” the association said in a press release. It added: “A consistently well-developed network of waterways ensures that transports by inland vessel can be planned and carried out for longer terms, even at low water levels.”

On the other hand, the German association of paper producers Verband Deutscher Papierfabriken, together with other German logistics, transport and industry associations, is urging the government to put in place solutions against logistics bottlenecks and driver shortages in the road freight transport system. These associations submitted a five-point plan to Federal Transport Minister Andreas Scheuer. According to the associations, “every year, around 67,000 truck drivers resign in Germany. However, only just under 27,000 new drivers can be found. This means that there is a net deficit of around 40,000 truck drivers each year, a situation which is now leading to acute bottlenecks in the entire logistics industry. This has serious consequences for the entire German economy and society.” The associations’ five-point plan includes increasing the attractiveness of the truck driving profession, improving training and skills, an image campaign aimed at employing new drivers, improving infrastructure and a comprehensive digitization strategy.

EC clears Euro 350 million scheme:The European Commission (EC) has cleared under EU State aid rules a German aid scheme to promote the shift of freight traffic from road to rail.

Germany notified the EC of the funding last August. The scheme, which has a yearly budget of Euro 350 million ($397 million), aims to support freight rail operators in Germany in order to contribute to a reduction of road congestion and CO2 emissions. It will run from 2018 to 2023.

Under the scheme, freight rail operators will be compensated for up to 45% of their track access charges – the charges that railway undertakings have to pay for the use of the rail network.

“Promoting the shift of freight transport from road to rail is one of many measures that Europe needs to take to help reduce our environmental footprint. The German aid scheme does exactly that – it supports this shift, ensures benefits are passed on to customers and will contribute to meeting the EU’s environmental and transport objectives, without unduly distorting competition,” Commissioner Margrethe Vestager in charge of competition policy said.

The EC expects the rail freight operators benefiting from the scheme to pass on the benefits of the aid to their customers, i.e., the freight shippers, through lower prices, the Commission said, adding: “Rail freight operators will be obliged to inform their customers of the fact that their track access charges have been significantly reduced.”