"Our logistics colleagues virtually performed miracles"
The low level of the Rhine in 2018 clearly demonstrated just how significant Germany’s most important water transport route is when it comes to supplying the Ludwigshafen site with raw materials. In the future, the BASF site on the Rhine will be more robustly equipped to deal with extreme climate conditions and their consequences. Site Manager Uwe Liebelt (ES) already has specific plans.
Production at the Ludwigshafen site had to be dialed back between the end of July and the middle of August 2018, initially due to cooling water limitations, while there were transport restrictions due to the extremely low level of the Rhine between October and December. During this time we had raw material shortages amounting to 12,000 metric tons per working day, as these goods are normally delivered via inland navigation vessels. Alternative transportation methods such as trucks, trains or pipelines were only able to cover around one-third of the missing materials. Our logistics colleagues virtually performed miracles during this time. However, despite their immense efforts, the damage caused due to production losses and additional logistics costs totaled around €250 million.
In November 2018, when the water levels were still low, we introduced a new control mechanism in the “Zukunftsbild Werk Ludwigshafen” (ZWL) project, entitled “Enhanced Climate Resilience.” The project team is focusing on two separate areas: cooling water and logistics. The cooling water project focus comprises topics ranging from expanding existing recooling plants, increasing their performance by means of intelligent cooling systems and networks, all the way up to devising new approaches for utilizing the Verbund to reduce cooling demand. With a package of short-term measures, we currently expect to be well-equipped to deal with cooling water issues should another weather period occur similar to the one in 2018.
When it comes to logistics, we are concentrating on the areas of inventory ranges, transportation and handling facilities. Using big data analyses, we hope to be able to predict low water events more precisely and earlier on. This will help us adjust the inventory flexibly and in advance so that we are prepared for extreme situations. Loading and unloading equipment is being expanded so we are able to be more flexible when it comes to the choice of transport meaning we can use the new BASF tank containers for example. For the upcoming summer, we will already reserve special inland navigation vessels which can still be used even in low water levels. This is known as “time charter.” We are also paying a risk premium to ensure sufficient shipping space far in advance of the potential occurrence of low water levels. However, these measures alone will not be sufficient to completely bridge a supply gap similar to that of 2018. Firstly, none of the existing low water level ships can be used if the water level at Kaub is zero, and secondly, there are only 5 such ships in existence. We have therefore commissioned the development of a new type of ship which can be used in very low water. And with regard to the long term, we are looking at expanding pipelines, for example in collaboration with Miro (Mineralölraffinerie Oberrhein – Upper Rhine Mineral Oil Refinery) in Karlsruhe.