To New Critics of the Foreign Dredge Act: Welcome Aboard!
The Foreign Dredge Act of 1906 seems to be having a moment. For those unfamiliar, the law restricts domestic dredging to vessels that are U.S.-flagged, U.S.-built, and mostly U.S. crewed and owned. It’s essentially the Jones Act but applied to dredging instead of cargo transport. The hosts of Bloomberg’s “Odd Lots” podcast had their interest piqued in this piece of protectionism during a March episode examining the frustrating process of freeing the grounded Ever Forward containership outside of Baltimore. That prompted an entire show dedicated to the Foreign Dredge Act that aired last week. What listeners learned left many of them incensed—or least facing fitful nights of sleep:
On the legislative front, meanwhile, the SHIP IT Act introduced by Rep. Michelle Fischbach and Rep. Byron Donalds this month would allow vessels from countries that are NATO members to conduct dredging operations in the United States. Four of the largest dredging companies in the world are located in NATO members, with each possessing more hopper dredges than the entire U.S. dredging fleet combined.
At the Cato Institute, we’re thrilled to see this newfound interest in the harms inflicted by this protectionist relic. After all, we’ve been on the case for quite a while. Dredging is necessary to maintain and expand the country’s ports and waterways that form an important part of the country’s economic lifeblood. By forbidding the use of international dredging services the United States is forced to rely on a domestic dredging fleet that is far smaller and less efficient than its international counterparts, resulting in higher costs and lengthier timelines for meeting U.S. dredging needs.
To learn more about this law and its deleterious effects, please see the following commentary published by the Cato Institute:
- “A Ports Policy Barnacled with Bad Law”: In this August 2015 Wall Street Journal op‐ed Daniel J. Ikenson examines how the Foreign Dredge Act and the Jones Act hamstring efforts for U.S. ports to accommodate ever‐larger containerships.
- “Defense of Louisiana’s Coastline Undermined by Protectionist Maritime Laws”: Cato scholar Colin Grabow highlights how the Foreign Dredge Act and Jones Act increase the cost of constructing coastal defenses against rising waters in Louisiana in this 2020 blog post.
- The Case against the Jones Act: Andrew Durant and Howard Gutman, recent guests on the “Odd Lots” episode examining the Foreign Dredge Act, authored Chapter 10 of this 2020 Cato Institute book in which they delve into the law’s many costs and efficiencies that could be unlocked by permitting the use of international dredging services.
- “Protectionism Harms the Safety and Efficiency of Texas Waterways”: In this 2021 blog post Colin Grabow discusses the particularly harmful impact of the Foreign Dredge Act on Texas waterways, with insufficient dredging forcing a bizarre maneuver in the Houston Shipping Channel called the “Texas Chicken”.
- “America’s Ports Problem Is Decades in the Making”: In 2021 Cato scholar Scott Lincicome dedicated an issue of his Capitolism newsletter to the woeful state of U.S. ports, noting the Foreign Dredge Act’s contributing role.