German rail freight operator DB Cargo has introduced 965 more wagons for steel transportation this year to ease the general wagon shortage against the backdrop of stubborn logistical problems on water, road and rail that steel industry sources do not expect to be solved even though water levels on the Rhine have started to rise again.
DB Cargo’s plan was initially to add 750 more wagons for steel in the course of the year, but this has been increased to 965, which are already in use, DB Cargo told S&P Global Platts Monday.
The operator has also introduced 10 additional weekly coal trains from Rotterdam to Germany this month which have the capacity to transport 2,700 mt per train.
German steel and raw material shipments have been badly hit by low water levels on the Rhine amid a general shortage of rail wagons and trucks to transport steel since summer this year.
“Logistics companies have saved money for years and now there’s a shortage on everything. Around 80% of wagons have been rationalized,” a buyer in southern Germany said.
The buyer added that there has only been a little rain in southern Germany and that there were issues with the Danube as well as with rail routes between Western and Eastern Europe and a lack of paths for trains.
A German mill source told Platts that it works with private rail freight companies now to limit the ‘dependency’ on DB Cargo. But as Deutsche Bahn has the monopoly on rail infrastructure, “you can’t go without them.”
Due to rain over the weekend, water levels have come back to 1.86 meters at Duisburg-Ruhrort Monday, up from critically low 1.57 meters in the beginning of last week.
The Federal Institute for Hydrology expects low water levels to continue into at least the first half of December despite the rise at the beginning of this week, which would nevertheless improve logistics along the river.
“I think water levels will normalize in April when we have had snowfall,” a Ruhr-based trader said.
“We are issuing offers with the term ‘with today’s valid freight price’,” the trader said as cargo prices from Antwerp to Duisburg have risen steadily.