Maritime transportation is crucial to national economic development as it offers a low-cost, safe, and efficient alternative for movement of freight compared to its land or air counterparts. River and channel dredging protocols are often adopted in many ports and harbors of the world to meet the increasing demand for freight and ensure safe passage of larger vessels. However, such protocols may have unintended adverse consequences on flood risks and functioning of coastal ecosystems and thereby compromising the valuable services they provide to society and the environment. This study analyzes the compound effects of dredging protocols under a range of terrestrial and coastal flood drivers, including the effects of sea level rise (SLR) on compound flood risk, vessel navigability, and coastal wetland inundation dynamics in Mobile Bay (MB), Alabama. We develop a set of hydrodynamic simulation scenarios for a range of river flow and coastal water level regimes, SLR projections, and dredging protocols designed by the U.S. Army Corps of Engineers. We show that channel dredging helps increase bottom (‘underkeel’) clearances by a factor of 3.33 under current mean sea level and from 4.20 to 4.60 under SLR projections. We find that both low and high water surface elevations (WSEs) could be detrimental, with low WSE (< -1.22 m) hindering safe navigation whereas high WSE (> 0.87 m) triggering minor to major flooding in the surrounding urban and wetland areas. Likewise, we identify complex inundation patterns emerging from nonlinear interactions of SLR, flood drivers, and dredging protocols, and additionally estimate probability density functions (PDFs) of wetland inundation. We show that changes in mean sea level due to SLR diminish any effects of channel dredging on wetland inundation dynamics and shift the PDFs beyond pre-established thresholds for moderate and major flooding. In light of our results, we recommend the need for integrated analyses that account for compound effects on vessel navigation and wetland inundation, and provide insights into environmental-friendly solutions for increasing cargo transportation.