HGK Shipping calls for long-term funding to support up to 1,000 shallow-water vessels by 2035 as low Rhine levels expose vulnerability
Low water levels on the Rhine are once again highlighting the vulnerability of Europe’s inland waterway transport network and the need for long-term investment in fleet renewal, according to HGK Shipping.
The European inland waterway shipping company is calling for a coordinated fleet renewal programme capable of supporting the deployment of up to 1,000 modern, energy-efficient and future-ready commercial vessels by 2035. The German government should play a leading role in this process and trigger private investments in the fleet renewal programme with a reliable long-term funding framework.
The Middle Rhine is currently illustrating the enormity of the challenge. Only 16 centimetres were measured at the Kaub water measurement point on 11 August. The forecasts suggest that the situation will only deteriorate even further and water levels will reach single-digit figures. Falling water levels are massively reducing the possible loads and therefore transport capacities on one of the most important European transport routes. Vessels that are optimised to operate in shallow waters make the crucial difference here. The nine vessels, which are optimised to operate in shallow waters and have been developed with customers at HGK’s in-house Shipping Design Centre since 2018, serve as the significant reference points for further projects.
“We’re seeing right now what a modern fleet can achieve: our “Synthese 18” is still transporting a load weighing 485 tonnes, even at the current extreme conditions at Kaub water measurement point. Let’s just imagine that we didn’t have this kind of capability, not just on individual vessels, but in relevant parts of our European fleet. 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,” says Steffen Bauer, the CEO of the HGK Group.
The current shallow water levels in the river Rhine in 2026 are certainly inhibiting German economic growth to a tangible degree. The present scale of the estimates is roughly a fall in GDP growth of 0.3 and 0.4 percentage points if the extreme low-water levels persist. The Kiel Institute for the World Economy estimates that the possible economic damage from the low water levels in the 3rd quarter will be as high as EUR 2 billion.
There is also a need to act in terms of structure. According to numbers published by the Central Commission for the Navigation of the Rhine (ZKR), the fleet conveying dry and liquid goods for the countries bordering the river Rhine involves approximately 7,800 vessels. About 80 percent of the dry goods fleet was constructed in the 20th century. In addition, only 13 new dry goods vessels and 38 new tankers came on to the market in 2024.
The small and medium-sized structure of the sector is an additional factor. A significant pro-portion of the fleet is operated by small and medium-sized companies as well as self-employed vessel owners and operators alongside larger shipping companies. The high investment sums and long amortisation periods for new modern vessels represent a significant hurdle, particularly for these companies.
“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 modernise 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,” Steffen Bauer continues.
The managers at HGK Shipping are fully convinced that a modern fleet must be resilient, efficient and “future-fuel-ready” – i.e. able to cope with future, climate-friendly drive systems and energy sources. At the same time, innovative vessel concepts must enable vessel owners to tap into new markets: e.g. for recycling and circular economy goods, alternative energy sources, project and heavy-duty goods as well as high-grade industrial goods. This will create additional potential to transfer shipments to the inland waterways.
HGK is therefore suggesting a long-term “Fleet Renewal Programme for Commercial Inland Waterway Shipping 2035”. The goal should be to mobilise investments in as many as 1,000 modern, commercial inland waterway vessels in Europe by 2035.
This kind of programme would also create demand for modern vessels and make a contribution towards safeguarding and further developing European shipbuilding capabilities and technical expertise.
If an average investment volume of EUR 12.5 million for each new vessel is taken as the basis for classification purposes, the target figure corresponds to investment potential of as much as EUR 12.5 billion.
HGK believes that there is a need for a reliable and adequately dimensioned funding framework in the long term, which particularly also enables small and medium-sized companies and self-employed vessel owners and operators to invest in new modern ships. Funding rates of as much as 40 percent should be examined here and fully exploited as part of the opportunities provided by state aid rules.
“The modernisation of the fleet is a European task – but Germany must take a lead in this process. We need a reliable investment framework from the German government up to 2035, which mobilises private capital and provides companies with planning certainty for building new vessels. This will enable us to strengthen the resilience of our supply chains and, at the same time, reinforce industrial wealth creation and shipbuilding expertise in Europe,” Steffen Bauer says.
HGK is therefore calling on the German government to continue developing the existing funding tools to form a reliable, long-term investment framework up to 2035. The current government programme for green inland waterway shipping, which initially provides EUR 125 million, forms an important basis for this, but neglects the necessary adjustments for long-term shallow water phases. It is now crucial to create a future opportunity that goes beyond individual funding and legislative periods.
A fleet renewal programme does not replace the investments that are necessary for Germany’s inland waterways. Optimising loads on the Middle Rhine, improving loads and stabilising the river bed of the Lower Rhine as well as eliminating further infrastructural bottlenecks are still just as important.
“This kind of programme would be a strong geographical signal for German industry. 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,” Steffen Bauer adds. “We emphatically welcome the German government’s approach to include the environmental associations in planning the necessary measures.”
