Oligopoly in the Dredging Industry Essay

911 Words4 Pages
Glauber deJesus Oligopoly in the Dredging Industry Jay Cashman Inc. is a construction company with many subsidiaries. The primary subsidiary is CDMC (Cashman Dredging and Marine Contracting). A successful dredging company that is responsible for the parent company's 75% revenue. The reason this company is successful is because it is part of Oligopolistic dredging market that is greatly benefited from the lack of foreign competition due to government interference. This oligopoly has some major barrier for entry. The high start-up costs of dredging equipment and vessels are significant. New entrants may also find it hard to compete with more reputable and established players that have the long-term relationships with key government agencies, including the US Army Corps of Engineers The dredging market in the United States is an vital part of the economy because two essential sectors, maritime tourism and international trade, rely heavily on dredging. Consequently, the industry benefits from public and private projects. Even though federal budget constraints was a relevant factor over the past five years, the industry has experienced revenue growth due to strong demand. Growth is anticipated to accelerate in the coming years as freight lines develop larger cargo vessels, which will create the need for investments in dredging services to boost the capacity of ports. A political push to make more funds available for port improvements is also expected to benefit the dredging industry. This would allow investment in better equipment and innovative technology to improve efficiency to meet growing demand. Dredging is the removal of debris and sediment from water bodies, Dredging companies usually charge for this service on the basis of cubic yards of material removed. The production rate of removal of material is what dictates whether a company can be profitable at

More about Oligopoly in the Dredging Industry Essay

Open Document