ONE OF MY FAVORITE SOURCES, Advisen FPN noted that German shipping faces curbs over drought-driven low water levels .
Most assuredly an “outside the box” risk for most practitioners.
ACCORDING TO the Oil & Gas Republic web site (http://tinyurl.com/y9jh5joe ), Berlin (dpa) – The domestic German shipping industry is facing restrictions because of low water levels as a result of the ongoing period of hot, dry weather.
On the country’s busiest waterway, the river Rhine, ships are being forced to carry lighter loads, Directorate-General of German Waterways and Shipping told dpa on Friday.
Shipping on the Elbe, which flows from the Czech Republic through eastern Germany to the North Sea via Hamburg, and the Oder along the border with Poland, is also restricted.
“If the warm high-pressure weather continues and no significant rain falls, the water levels will fall further,” spokeswoman Claudia Thoma said.
“If so, shipping transport will come to a halt on certain stretches,” she said, adding that the transport of goods on Germany’s rivers could become more expensive.
Most practitioners consider flooding more than drought.
However, when rivers are a primary means of transport, as they are in some areas of the U.S., Europe, and elsewhere, shallow water can, and in the case cited by Oil & Gas Republic, does cause a serious impact on the supply chain.
Granted, there are alternatives to boat and ship transportation, but the alternatives usually are more expensive – the cost-per-unit, regardless of product – is higher if the same product is transported by rail or truck. That means a hit on someone’s bottom line: either the organization using the commodity as a component of its product, or the end consumer; someone will pay more for the end product.
While waterway transportation is not the primary mode in the U.S., waterways carry a substantial tonnage. The following table shows the amount of traffic in millions of tons carried.
While it’s difficult to find official government costs-per-ton information, the Journal of Commerce (a/k/a JOC) web site (http://tinyurl.com/y88qpdwr ) provides some information based on a National Waterways Foundation (NWF) report from 2012. According to the NWF, 
Unlike Lakes freighters that navigate the Great Lakes and the Erie Canal to the ocean, barges have a shallow draft; they don’t need a lot of depth beneath them. By the same token, they carry less than a Lakes freighter.
The “bottom line,” however, remains the same: water borne freight’s cost-per-ton/mile is less than overland transportation (trucks, trains).
Most heavy freight in the U.S. is multi-modal; that is, it uses more than one type transport.
While Europeans are concerned with drought, shippers also need be concerned with flooding and spring run offs that can make normal waterway transit dangerous.
For Enterprise Risk Management practitioners, supply chains are a risk for a multitude of reasons.
The Europeans now know that drought is a concern to consider.
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