There are literally hundreds of companies that buy a small CSD and become dredging contractors. And a huge percentage of these companies fail, either on the first project or quickly after the first project.
One of the issues is the mentality of a Gold Digger, see this Knowledge Update.
But today I want to focus on what you can do to increase your chances of success in the dredging industry. Today we discuss the Top 5 Factors That Determine Your Dredging Success.
The quality of the crew will greatly impact the production you can achieve and the amount of uptime of the vessel.
The production difference between a good operator and a bad one can be more that ten percent. And a crew that is great at maintaining the vessel can keep doing that higher production for a much longer time.
2. Project staff
The dredger’s crew needs directions. What needs to be dredged and in what order? For this you need good project staff. Staff that understands the dredging process, can make a dredging plan and a planning.
The head of the staff, the project manager, also needs to understand the dredging contract and be able to communicate effectively with the client.
When these people are doing great a lot of problems on the project will be either prevented or quickly solved.
3. Office staff
Both the vessel and the project need support. This can be for the purchase of spare parts, to fix the cashflow of the project or to get specialised assistance. The latter can also be outside consultants, but it needs to be arranged by the head office.
In addition, the top management of the company needs to empower the project staff and provide the resources such that the project staff can properly execute the project.
Good office staff will make sure that the current project can be executed flawlessly, but also make sure there a new project to go after this one.
4. Good equipment
As a professional company you need professional equipment. Good equipment, whether it is the dredger or the support equipment, will earn itself back easily over the years.
I’ve worked with a few companies that bought cheap equipment, but when it arrived on site for the first time it took months to get it to dredge one cubic meter. This is the way dredging companies go bankrupt.
Invest in good equipment and you will never regret it.
5. Unit rate
Projects are awarded to the dredging companies that can offer the lowest unit rate. The unit rate is the combination of money and volume. Before you start saying, I need to cut costs to get a lower unit rate, think about the big four dredging contractors in the world.
They all have state of the art equipment, largely western crew, which is more expensive, and a western head office, which is also expensive. But they still get awarded project after project, often beating the local contractors.
They focus on production at least as much, maybe even more, than on cutting costs. They try to find the perfect balance in the unit rate.
These are the five top factors that determine your success in the dredging industry. There are many more smaller factors, but if you focus and start with these 5 you will be way ahead of the majority of dredging companies that are starting.
To your success,