Dredging Protectionism.

• Author: Grabow, Colin

Efficient functioning of America's ports and waterways is critical to the distribution of goods throughout the U.S. economy. Nearly 70% (by weight) of the country's international trade transits via water, along with a smaller percentage of domestic commerce.

Maintaining and expanding these vital pieces of infrastructure require dredging, the removal of soil, sand, and other materials from the underwater channels through which vessels navigate. Hampering these efforts, unfortunately, are two protectionist maritime laws: the Jones Act and the Foreign Dredge Act.

The 1920 Jones Act requires that merchandise transported by water between U.S. ports be on vessels that are U.S.-flagged, U.S.-built, and at least 75% U.S.-owned and crewed. The sludge removed by dredging is considered "merchandise" under this law and must be moved by these types of vessels. The 1906 Foreign Dredge Act applies the same requirements to dredging vessels specifically. As a result of these laws, American ports are forced to rely on dredges that typically are smaller, older, and less efficient than their foreign counterparts.

Old and small fleet / The privately owned U.S. fleet of hopper dredges, considered by the U.S. Army Corps of Engineers to be the most appropriate vessel for operating in coastal ports, consists of 16 vessels with a collective capacity of approximately 74,000 cubic meters. In comparison, four European dredging companies--Boskalis, DEME, Jan de Nul, and Van Oord--own 87 hopper dredges with a collective capacity of 986,000 m3. The largest U.S. hopper dredge by capacity, the Ellis Island, would rank as only the 31st-largest in the European fleet.

U.S. vessels aren't just smaller and less numerous, they are also older, with an average build year of 1987. One U.S. hopper dredge, the Columbia, began its life in 1944 as a World War II landing ship before being converted to a hopper dredge in 1973. These old vessels require more maintenance than newer dredges, and they lack technologically advanced features that would lower their cost of operation. The European dredge fleet, meanwhile, has an average build year of 2004.

This U.S. inferiority is almost preordained. Requiring vessels to be U.S.-built means that they must be acquired from uncompetitive U.S. shipyards at considerably higher prices than those constructed abroad. In 2020, Great Lakes Dock and Dredge--the largest U.S. dredging firm, with a 39% market share--ordered a 5,000 [m.sup.3] capacity hopper...