From the top of the picturesque town of Kaub, Gutenfels Castle overlooks a choke point for the German economy.

Kaub sits at the shallowest point of the Rhine – the river and vital trade artery that runs from Switzerland to the Netherlands, through the heart of Teutonic industry.

A period of drought has reduced the water depth in this region of western Germany to crisis levels, at which barges are forced to reduce the size of their cargo or risk running aground.

Now Germany’s most important shipping route could be snuffed out, in a repeat of 2018’s “extreme low water” event – with devastating effects for downstream manufacturers, at a time when supply chains have already been ravaged by Covid and the war in Ukraine.

“It’s definitely a logistical headache,” says Olivier Lejeune, a Paris-based analyst who monitors water levels in the Rhine.

According to Holger Schmiedling, an economist at Berenberg Bank, sustained low water levels would hit the chemical industry particularly hard, causing Germany’s GDP to fall by 0.3% in the “worst-case scenario”.

Stretching 766 miles, the Rhine is the second longest river in Central and Western Europe. Passing through Lake Constance on the border of Germany, Switzerland and Austria, to the Hook of Holland, it crosses major cities such as Strasbourg, Cologne, Düsseldorf, Basel and Rotterdam. Kaub is about halfway there.

It also feeds the rivers passing through eastern France and further into eastern Germany, creating a rich vein for river transport. According to the Central Commission for the Navigation of the Rhine (CCNR), based in Strasbourg, it is used daily by thousands of ships, making it one of the busiest inland waterways in the world.