The 1906 Dredging Law That May Be Holding Back The U.S. Economy

Tracy Alloway (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:15)

And I'm Joe Weisenthal.

Tracy Alloway (0:17)

Joe, do you remember when you said you were gonna base your entire identity on repealing the Foreign Dredge Act of 1906?

Joe Weisenthal (0:25)

Right.

Yeah, I do. So we did an episode very recently about your cargo that still stuck on this ship outside Baltimore. And one of the things that came up was that there is this law from 1906 that prevents foreign dredging equipment from operating in the United States. United States doesn't have a whole lot of high-power dredging equipment.

And I found that really wild. And so I jokingly said, hey, I was gonna make that my whole identity. And only half jokingly said, now we have to do an episode on the Foreign Dredging Act of 1906

Tracy Alloway (1:00)

I mean, I don't think any of those should be jokes anymore. I'm into it. Let's start.

Joe Weisenthal (1:05)

And this is not a joke to you at all.

Tracy Alloway (1:07)

No.

Joe Weisenthal (1:07)

Because you still don't have your stuff.

Tracy Alloway (1:08)

Absolutely. Absolutely. So I have a personal interest in the health of the US dredging industry. Let's put it that way. Because all of my belongings are currently stuck on Ever Forward, this giant container ship that ran into the mud bank in the Chesapeake Bay. It's still stuck there. There are dredgers at work. They're gonna unload all the containers and see if they can refloat it.

But again, one of the things that's emerged from this entire incident is, I guess, years, decades of underinvestment in the US dredging industry so that we actually don't have a lot of dredging capacity. And our previous guest who was talking about this, Sal Mercogliano, again, he has a great YouTube channel if you're interested in what's going on with the Ever Forward. But he was saying that the dredgers that are on the scene of the Ever Forward right now can move about 60 cubic yards of mud in each, every time they sort of dredge the bottom.

Whereas other types of dredgers, international dredgers, the kind that they had on scene with the Ever Given when it was stuck in the Suez Canal, those can move 70,000 cubic yards of material in one hour. So that gives you an insight into the different levels of dredging capacity we're talking about.

Joe Weisenthal (2:26)

The other thing, and that is just a wild divergence. That was the aspect that blew my mind and the fact that maybe a contributing factor to the lack of dredging capacity is a law that was over a century or old. That blew my mind.

But as we've sort of looked into this, and we have been talking about dredging within the context of freeing the ship and the one in the Suez last year, the other thing that is, it may be that a lot of infrastructure issues in the United States, when we talk about constrained capacity at the ports, when we talk about the fact that US ports don't necessarily have the capacity to handle easily the world's biggest ships, part of that may have to do with dredging.

Tracy Alloway (3:06)

Absolutely, and we've been building these ships bigger and bigger, and at the same time, the port infrastructure hasn't grown alongside it, the dredging infrastructure hasn't grown alongside it either. So it is not just a problem of particular interest to me, it's a problem that we should all be focused on. And so here is an episode dedicated to the Foreign Dredge Act of 1906 And I can't wait. We really do have the perfect guess for this one.

So we are going to be speaking with Howard Gutman. He is the managing director of the Gutman Group consultancy, and also the former US ambassador to Belgium. We're also gonna be speaking with Andrew Durant. He is a managing director at Samuel's International Associates, another consultancy.

But they're going to be able to give us the pro repealing the Foreign Dredge Act.

Joe Weisenthal (3:58)

We're gonna have to do afterwards probably, like I keep the Foreign Dredge Act just out of fairness, but yes, I'm very excited about it.

Tracy Alloway (4:04)

Okay, let's do it. Howard and Andrew, welcome to the show.

Howard Gutman (4:08)

Pleasure to be here.

Tracy Alloway (4:10)

So why don't we begin with the very basic stuff? What is the Foreign Dredge Act of 1906? And what happened in 1906 or earlier to make the US think that it only wants to have dredgers that are built and crewed by Americans?