Expanding Competition, Expanding Ports
Competition in U.S. Hopper Dredging
June 14, 2018
The U.S. markets for dredging are protected by laws and contracting policies that effectively prohibit vessels built overseas from competing in the United Sates. This is particularly true for projects that require hopper dredges, the dredge that performs much of the work needed in ports, harbors, and access channels exposed to the ocean. The Jones Act and the Dredging Act restrict competition in U.S. hopper dredging markets and result in higher prices for removal of dredged material. Since the Army Corps of Engineers is the primary consumer of hopper dredging services, the U.S. taxpayer ultimately bears the burden of the restricted competition. Opening hopper dredging contracts to foreign competition would increase the number of bidders for each contract, significantly lowering the cost of dredging. Over the past decade, European and Asian dredging companies have invested heavily to modernize their hopper dredge fleets. U.S. dredging companies have not invested at the same rate as their international counterparts in modernizing their fleets. Allowing foreign competition would have the added benefit of drawing more modern and cost-effective vessels to perform dredging along the United States’ coasts.