Stephen Mnich and his eight siblings grew up on the 85-year-old boat, which is considered small by today’s standards.

However, for the hundreds of family-owned companies that transport more than 100 million tons of dry cargo such as coal, steel and grain on the Rhine every year, using more flexible ships such as the MS Salisso (which can carry up to 866 tons) starts to make more sense.

Not only do they allow families like Stephan’s to operate without a crew, but the lighter boats also make it easier to glide on the Rhine in the summer when water levels are at their lowest.

“This is how we live, this is how my parents live,” said Mnich, 31, sitting in her ocean-themed living room, filled with family photos.

Drought is a growing problem for the international shipping industry, threatening the supply chains that underpin the global economy.

The industry is responsible for transporting 90% of the world’s cargo, and as globalization spreads, it is increasingly reliant on large ships.

Ships of this size facilitate the transport of goods worth millions of euros every day. But their usefulness is increasingly challenged by low water levels in the Rhine and other important waterways.

Map showing the minimum navigation depth of the Rhine River in Germany

This summer has been the driest on record, forcing operators to limit the number and depth of ships passing through the Panama Canal, causing some ships to wait two weeks longer than normal to enter the vital trade artery between the United States and Asia.

The restrictions facing the business, which has been run by the Mnich family for three generations, also highlight the industry’s inability to cope with more extreme weather conditions.

When Munich and his brother decided to expand by purchasing two new boats, they approached a bank about building modern vessels small enough for two people to operate.

“They just laughed,” he said. “They want a capacity of at least 3,000 tons.”

A portrait of the Munich family is displayed in the living room of the Sallisaw
A portrait of the Munich family is displayed in the living room of the Sallisaw ©Ben Kilb/Financial Times
Stephen Mnich cleans the Salisso, one of three ships in his family's shipping business
Stephen Mnich cleans the Salisso, one of three ships in his family’s shipping business ©Ben Kilb/Financial Times

However, a vessel of this size ran into trouble in the summer of 2018, when a heat wave caused enough water to evaporate in the shallowest parts of the Middle River from Bonn to Bingen for the “decisive” measuring station outside the village of Kaub to be able to read a 107-day low at 78 cm.

German industrial output fell by nearly 5 billion euros in 2018 as most ships ran aground on the Rhine and companies sought alternative routes to obtain raw materials and natural gas.

“The impact of the dry season . . . in 2018 should not be underestimated,” the Strasbourg-based Central Commission for Rhine Navigation said in its 2021 report.

While shipping lines may shift to smaller vessels, analysts stress that this could increase shipping costs. Bremer analyst Jonathan Roach said the shift to mid-sized ships would “lose economies of scale”.

To solve transport bottlenecks on the Rhine while protecting profits for European manufacturers, Berlin has proposed a €180 million project to deepen the shallowest part of the Rhine by 20 centimeters (in part by chipping away at protruding rocks from the river bed), experts say It said this would translate into approximately 200 tonnes of additional vessel capacity.

Chart showing how draft affects the amount of cargo a ship can safely carry. The data shows the minimum channel depth and draft for ships sailing along the Mid-Rhine River to the German town of Kaub.

But the project, scheduled to be completed in 2030, has been criticized by many residents along the Rhine. They were concerned that new hydraulic structures that would divert water into the river would create an eyesore.

For Uwe Arndt, head of integrated logistics for Europe, the Middle East and Africa at German chemicals group Covestro, projects like this are important for Leverkusen, Dormagen and Krefeld-Udding. The future of the root plant is critical. Nearly one-third of the products produced in these factories are shipped along the Rhine to customers.

“We need bulk shipping capacity,” Arndt said, adding that with driver shortages and rail strikes, there is no real alternative to shipping.

His company, in partnership with HGK Shipping, ultimately owned by the city of Cologne, built the special low-water tankers MS Curiosity and MS Courage, which can sail in water levels as low as 40 centimeters and have a capacity of 1,419 tons each. “These ships could have been operational in 2018,” Arndt said of the year that was a wake-up call for many industries.

HGK Shipping chief executive Steffen Bauer said he expected demand for low-water vessels to grow as climate change threatens to increase the frequency of “extreme situations” on the Rhine, but what he was really concerned about is a longer term solution.

The tankers customized for Covestro can run partially on electricity, reducing emissions by 30%. But as companies prepare to meet tougher emissions rules, Ball said he expects ships will at some point need to be retrofitted to run on hydrogen instead of diesel.

“We have to think about engines, and by 2030 we expect it will be possible to use hydrogen fuel cells,” he said.

Inland car freighter transporting coal along the Rhine River
Inland motor freighter transports coal along the Rhine River while navigating low water in the Walsum district of Duisburg, Germany ©Bloomberg

The change will be a bigger challenge for family-owned businesses that dominate the dry goods industry, such as the one Mnich and his three brothers inherited from their parents.

When banks refused to finance new boats, the brothers purchased two older boats that did not have engines that could be easily upgraded to run on hydrogen.

Mnich is not yet sure whether it is worth investing in hydrogen-friendly technology, saying liquid natural gas was seen as the future years ago. “If we had built a ship five years ago that ran on LNG, we would have had a big problem,” he said, noting that Germany was racing to wean itself off gas after Russia invaded Ukraine.

For now, he believes his future in the industry won’t be too different from his parents’. He and most of his siblings were reluctant to leave the industry. “Most of us can make the same money more easily (elsewhere),” he said. “It’s about passion.”

Additional reporting by Oliver Thelin


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