Report: U.S. Dredging Industry Is Thriving, While Saving Taxpayers Money
A new report released by Mike Hooks LLC showcases the dredging industry’s strengths and highlights the advantages it provides to American taxpayers. The United States is in the midst of an unprecedented boom in dredging projects, many fueled by the Infrastructure Investment and Jobs Act and other infrastructure-related bills passed in recent years.
“The Mike Hooks Report: An Analysis of the FY22 U.S. Federal Dredging Market” is authored by Michael Gerhardt, senior director of government affairs at Mike Hooks LLC, and it gives an overview of the U.S. dredging industry.
It is being publicized by American Maritime Voices, the inward-facing arm of the American Maritime Partnership. While the AMP advocates for the maritime industry to external audiences and constituencies, AMV helps give mariners and members of industries that support maritime an opportunity to learn more about their own and adjacent industries. It enables exchanges of information and stories from mariners but doesn’t contribute to politicians or ask for donations.
In fiscal year 2022, a total of 52 Jones Act dredging companies were awarded federal dredging contracts. The Mike Hooks Report shows that the dredging industry is a thriving and competitive marketplace where numerous companies vie for government projects.
Strong Competition Saves Money
What’s particularly striking, according to the report, is that for 72 percent of the contracts, the private sector industry’s winning bid came in lower than the independent government estimate. The cumulative result of this fierce competition was substantial, with the industry saving the federal government and, by extension, American taxpayers $670 million in fiscal year 2022 alone.
Dredging Contractors of America CEO & Executive Director William Doyle attributes these low costs to the number of companies engaged in the bidding. “These companies fiercely compete for each job,” Doyle said. “They are also very successful entrepreneurs. Each company has a team of innovators, engineers, technicians and professionals who wake up every day trying to find a better way to do a job—get more out of a piece of machinery or designing a new tool in-house that will give them a competitive advantage.
“Dredging awards are public–so the losers on a particular project know what that price point is–and next time around they’ll be ready,” Doyle said.
In total, 59 projects came in under budget by more than 10 percent than estimated, with 27 projects costing at least 25 percent less than expected and 15 projects achieving budget reductions of at least 40 percent. “These statistics unequivocally illustrate the cost-effective nature of the U.S. dredging industry, which is a critical component of the 650,000 men and women of American maritime,” he said.
Dredged Material
The report also touts the increasing use of dredged material to support the marine environment, saying it is becoming a “nationwide trend.”
“It really quite simple—instead of dumping excavated dredged material at sea, we are now more and more using that material for environmental purposes such as rebuilding the islands in the Chesapeake Bay, layering as coastal restoration material in the Carolinas and reusing for dike rehabilitation along the Mississippi River and the Gulf Coast,” Doyle said.
Dredging has gained renewed importance on the Gulf Coast, where states like Louisiana benefit the most from the Jones Act’s economic impact.
“My office has made dredging and proper maintenance of water management systems a top infrastructure priority as ports and waterways are vital economic engines that serve our waterways,” said Rep. Clay Higgins of Louisiana’s 3rd Congressional District in a Maritime Day address. “We’ll continue to advocate for the needs of our ports and maritime assets by working with industry, state and federal partners to improve dredging efforts and grow commercial activity for the region.”
Thanks to the steady flow of contracts offered for these projects, U.S. dredgers have engaged in a $2.5 billion recapitalization spree with newly built dredges already built and on the way, expanding the Jones Act fleet.
