* Shallow water still hampers Rhine, Danube sailings
* Some vessels sailing under half full
* Length restrictions in southern sections of river
HAMBURG, Nov 16 A further fall in water levels this week is hindering freight shipping on the Rhine and Danube rivers in Germany and many vessels are sailing only 50 to 20 percent full, traders said on Wednesday.
Rhine water levels have fallen because of dry weather in Germany and Switzerland, continuing a period of shallowness which started in late October.
Water levels are so low that the maximum length of vessel permitted to sail in some southern sections of the river has been reduced to 116.50 metres from 135 metres normally, a spokeswoman for the German inland navigation agency said.
"Vessels over this length have to apply for a permit and undertake a test sailing," she said.
The river is too shallow to allow vessels to sail with full loads on the river from Duisburg in the north to Switzerland, traders said.
Water is so low on the Rhine from Cologne to southern regions around Koblenz that vessel owners have a contractual right to refuse to sail if they think their vessels will be damaged.
Low water means vessels are unable to load to full capacity and surcharges are added to freight rates, increasing costs for cargo owners.
More vessels are also required to ship the same freight volume. Some cargo owners have to pay for the full vessel even if it sails half full.
Low water is hindering shipping on the entire German section of the Danube river, traders said. The Danube has also fallen to the level at which vessel operators can decline to sail for safety reasons although their had been a slight increase in water levels in the past two days, traders said.
River catchment areas in Germany and Switzerland are forecast to be mostly dry up to Sunday, so no immediate improvement is in sight, traders said.
The Rhine is an important shipping route for commodities including grains, minerals, coal and oil products such as heating oil. It is a major route for Switzerland's commodity imports.
The Danube is a major route for east European grain exports to west Europe. (Reporting by Michael Hogan; editing by Keiron Henderson)
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