While lacking in prominence, the Dredging Services industry is an essential part of the US economy; furthermore, as ocean freight lines develop and incorporate enormous cargo vessels into their fleets to improve shipping efficiencies and economies of scale, the need for dredging services will increase.
For these reasons, industry research firm IBISWorld has added a report on the Dredging Services industry to its growing industry report collection.
While lacking in prominence, the Dredging Services industry is an essential part of the US economy.
This is because two vital sectors of the US economy, maritime tourism and international trade, depend heavily on dredging services. Additionally, dredging services play an important role in restoring and preserving wetlands, coastlines and maritime habitats. As such, the industry benefits from public and private restoration projects. Strong underlying demand for dredging services is expected to grow industry revenue 9.5% to $2.5 billion in 2013.
Federal funds allocated toward dredging services are provided by Congress through the Harbor Maintenance Trust Fund (HMTF) and administered by the US Army Corps of Engineers.
According to IBISWorld Industry Analyst Deonta Smith, “Over the past five years, funds allocated toward dredging services have been insufficient to meet demand, even though the HMTF is operating at a surplus.”
While $1.9 billion in stimulus funds earmarked for dredging services benefitted the industry in 2009, US ports, harbors and waterways have been insufficiently dredged due to a weak economic environment and a budgeting deadlock on Capitol Hill. Consequently, industry growth has not been as strong as it could have been over the past five years. Nevertheless, over the five years to 2013, IBISWorld estimates that industry revenue will increase at an annualized rate of 4.4%.
As ocean freight lines develop and incorporate enormous cargo vessels into their fleets to improve shipping efficiencies and economies of scale, the need for dredging services will increase. “Maintenance dredging in ports and harbors will be paramount to ensure that US ports and harbors remain competitive and accessible to these large vessels,” says Smith.
According to the American Association of Port Authorities, US seaports and their private sector partners are expected to invest $46.0 billion in capital improvements (including dredging) over the next five years. Industry operators are also expected to invest in newer, more powerful and fuel-efficient dredging fleets to meet increasing demand.
Press Release, November 4, 2013