Page 8: of Marine News Magazine (November 2023)

7 9

By the

Numbers

Dredge Construction

Booming in

Competitive US Market

A dredge building boom that has been underway in the 408% in value since 1993. In these 30 years the subset

United States for several years is still going strong as the of hopper dredging contract awards has increased 620%, market remains highly completive for solid project work- Gerhardt added.

loads in both the public and private sectors. “While there have been peaks and valleys over this time

According The Mike Hooks Report, an analysis of the period due to funding and level of need, there has been

FY22 U.S. federal dredging market compiled in Septem- a steady climb,” Gerhardt said. “On average the hopper ber 2023 by Michael Gerhardt, senior director of govern- dredging market, which has ? uctuated between $300 mil- ment affairs at Mike Hooks, LLC, 52 Jones Act dredg- lion and $700 million over the past seven years, annually ing companies were awarded federal dredging contracts in accounts for approximately 30% of the total market.”

FY2022. On average there were three bidders per project, Gerhardt noted that his report only details federal with 20 projects receiving ? ve or more bidders. dredging projects, and that work in the private sector has

Seventy-two percent of the time, the private sector in- also been solid.

dustry winning bid was lower than the Independent Gov- To help meet the steady demand, the industry has in- ernment Estimate (IGE); and 95% of the time, the private vested heavily in new construction of U.S. owned, built sector industry winning bid was lower than the Govern- and crewed Jones Act dredges: over $2.5 billion over the ment Estimated Awardable Range (GEAR), which is IGE past ? ve years. Newbuild dredges have been “rolling off + 25%. When compared to the IGE, 59 projects were the blocks”, said William P. Doyle, CEO, Dredging Con- lower by more than 10%, 27 projects were lower by more tractors of America. Doyle said he expects this trend will than 25% and 15 projects were lower by more than 40%. continue into the foreseeable future, noting dredging “What does this mean? It means that the U.S. dredg- companies have also been investing in other equipment ing industry (private sector dredging companies) is ? ercely to support their activities, such as cranes, barges, tugs, competitive and is delivering a service that saves the federal scows, tender boats, survey vessels, boosters, pipelines, government, and therefore the taxpayer, hundreds of mil- pontoons, etc.

lions—$670 million in FY22 alone (when compared to “The U.S. Jones Act dredging industry is not just highly the GEAR), and this trend happens year over year,” Ger- competitive and in the midst of the largest ? eet capital- hardt said. ization ever, but it is reliable. The foreign entities have a

The U.S. federal dredging market bid out to U.S.-? ag tendency to overpromise and underperform— then walk

Jones Act private sector dredging contractors has grown away when times get tough,” Doyle said. 8 | MN October 2023