Maritime-Executive: HGK Has a $14.5B Plan to Make the Rhine Barge Fleet Ready for Drought

Published by maritime-executive

German barge line HGK has put out a policy recommendation for a generational investment in new tonnage for the nation’s inland fleet. According to HGK, the water level problems on the Rhine – a recurring issue in every drought year – could be resolved with a fleet of shallow-draft-capable vessels, like those that the firm has invested in building in recent years. The solution, the company says, is a massive fleet renewal program centered on designs to fit current river conditions, using government support to build as many as 1,000 new inland cargo vessels – and build them in Europe. 

As of Wednesday, water levels on the Middle Rhine were so low that conventionally-designed barges could not transit past the shoals at Kaub, the shallowest point on the navigable section of the river. The drought is not expected to end anytime soon, and levels will likely stay low for the rest of the summer. Even areas upstream and downstream are affected by draft restrictions, and industrial shippers have to pay more to move the same amount of cargo in more trips. Road and rail are picking up some of the slack, but capacity on these modes is limited. 

Special shallow-draft barges aren’t as restricted, HGK says. Its newly-designed Synthese 18 inland tanker can still carry nearly 500 tonnes past Kaub, when other vessel classes cannot transit the area at all. “That’s exactly what’s at stake with our demand for as many as 1,000 modern vessels: keeping industrial supply chains moving for longer, even if water levels are extremely low,” said Steffen Bauer, CEO of the HGK Group, in a statement Thursday.

The obstacle to switching to a structurally different fleet is in no small part a cost issue: many operators – including single barge owner-operators – can’t afford the upfront capital cost to replace all their equipment. Old is standard: 80 percent of Germany’s inland fleet was built before 2000, and vessel lifetimes in freshwater are very long. 

“We cannot prevent low water levels. But we can build vessels that are still capable of operating for longer in difficult conditions. If we want to modernize the fleet, we must also enable small and medium-sized companies and self-employed vessel owners and operators to invest in the next generation of vessels,” Bauer said. 

Germany’s government has a 125 million euro fund for inland shipbuilding, but a much bigger program would be needed for a 1,000-vessel renewal initiative. HGK estimates the price at roughly $14.5 billion (including private investment) to build out the fleet at an average cost of $14.5 million per hull. 

Additional work in stabilizing the river bed, cutting infrastructure bottlenecks and planning loads on the Middle Rhine will be essential too, HGK said. “The companies along the river Rhine in particular must be able to rely on the fact that their supply chains function properly, even in difficult conditions. Those who invest in a resilient waterway and a modern fleet are therefore investing directly in the future viability of Germany as an industrial centre,” said Bauer.