Seattle’s fleet is aging, but modernization efforts are running into obstacles

Published on
October 9, 2019

The commercial fishing fleet based in Seattle, Washington, U.S.A. – the home port for many vessels fishing in the Gulf of Alaska, the Bering Sea, and the Aleutian Islands – is aging, but modernization efforts have run into numerous obstacles.

Chad See, the executive director of the Freezer Longline Coalition and a board member of the Washington Maritime Federation, told SeafoodSource restrictive U.S. regulations, a tight credit market, catch limits created by fishing quotas, and the diverse needs of a fleet with varied objectives are hindering progress on fleet-renewal efforts.

“The fleet I represent – hook-and-line catcher processors and freezer longliners – is aging, with the average vessel between 30 and 40 years old and some dating to before World War II. Their lifespan has expired and many are past due to be replaced,” See said. “But they continue to operate because they’re safe vessels, they are in full compliance with regulations, and it is difficult to replace them.”

There have been notable exceptions, such as the F/V Blue North, the F/V Araho, the F/V America’s Finest, and the F/V North Star, and a new 271-foot catcher-processor that is currently being built for Arctic Storm, which fishes for pollock and cod in the Gulf of Alaska. 

But the pace of new maritime construction predicted by a 2016 study by the McDowell Group, an Alaska-based consulting firm, is not being met. The study estimated four new vessel projects expected annually for every year between 2017 and 2026 in the North Pacific fleet alone, with an approximate total value of USD 1.6 billion (EUR 1.5 billion).

Instead of a huge bump in new construction, there has been what See described as a “steady trickle” of new investment in fishing vessels. Then and now, financing remains a significant impediment to the effort of fleet modernization in the U.S., according to See. 

“[There are] limitations on investment, challenges on investment to the fishery,” he said. “Because of that, I don’t think you’re going to see a large increase in new builds, but rather a steady trickle of new investment in vessels is what you’re going to see in the future, until financing opportunities change – if and when they do change.”

There is ample financial upside to building new, as replacing older, smaller vessels with more efficient and capable newer ones is worth the investment, See said. Better fuel efficiency, safer working conditions, more automated on-board processing, and most importantly, a greater utilization of the catch, all result in a more robust bottom line. For example, the F/V Blue North was specifically built to retain and market ancillary products such as livers, collars, stomachs, skins, and frames that it is now selling in Japan, South Korea, and China.

“If you can have more processing capabilities on board to use fish heads, the guts – every last piece of that fish, then you’re maximizing your return on that harvest,” See said. “Ideally, you have a vessel that has the capacity on-board that allows you to create new product forms using parts that otherwise would be wasted.” 

Ruben Nielson, the Seattle-based vice president of U.S. operations for Carsoe, a Denmark-based manufacturer and supplier of seafood processing technology, told SeafoodSource advancements in on-board processing technology have created value-added opportunities that further increase the value proposition of new-builds. Automatic freezers, palletizing systems, and traceability and tracking software are the upgrade most in demand by those building new vessels.

“Most companies want to have more technology, want to improve their working conditions, the quality of their product, so I do think that’s where this is going. But right now, mostly there’s just a slow replacement of what’s already there,” he said. “The fleet is getting old, but it takes a lot of money to take on a project like building a new vessel. But at some point, people have to make the decision to build new.”

Nielson said the United States can’t follow the path taken by Russia, where a fishing vessel construction boom is underway after the government offered additional fishing quota to companies that built new ships.

“There’s not much extra quota lying around to create a bigger slice,” he said. “I think we have an advantage, as that means the U.S. fishing sector is very well-regulated – I think we do a good job on that – but it takes that option off the table.”

Also complicating efforts are U.S. regulations like the Jones Act, which requires all goods – including seafood – traveling between U.S. ports be transported on ships built in the U.S. with materials sourced domestically. Furthermore, the law requires commercial fishing vessels must be owned and operated by United States citizens or permanent residents. That law results in U.S. companies paying around twice as much to build a new vessel as foreign companies who can build in cheaper places, such as Turkey.

“A Russian longline company can build new boat in Turkey for USD 15 million to USD 20 million [EUR 13.7 million to EUR 18.2 million], while we would have to build that in U.S. at a price of USD 30 to USD 40 million [EUR 27.4 million to 36.5 million],” See said. “That’s the reality, and it makes it more difficult for our fleets to modernize.”

Still, See is optimistic more companies will jump into the modernization effort in the Pacific Northwest and Alaska. Many fishing companies and investors are still on the sidelines, studying the performance of the new-builds that have recently come into operation.

“Most fishing vessels here are not as efficient as they could be. But a lot of the technology being added to these new vessels, like the Blue North, has never been used before in the Northern Pacific and the specific ocean conditions we have here. So they’re waiting to see how they work through the challenges of that before they commit. But I will say there are a lot of curious people in the industry watching to see how that works out,” See said.

Of course, that leads to another problem, he added.

“When everyone has a different idea of what their ideal vessel is, that contributes to cost,” he said. “You don’t get a lot of vessels built on spec in the U.S. We don’t have companies working together to build five or six boats out of one vessel design. Each of those companies has their own idea of what’s the ideal vessel for their company.”

Nevertheless, See is convinced the new-build boom is coming.

“It will be a steady source of new construction in our country, because while there’s been investment already, many vessels are in dire need of updating,” he said. “Commercial fishing is a global industry. We’re competing in the global market on sales and for the price of our fish. We need to ensure we maintain competitiveness with the rest of the world as they upgrade their fleets and become more efficient in their harvesting. And we need to do that at the same time we’re ensuring we have the safest and most environmentally friendly vessels, which will help ensure we can maximize our cost efficiencies as a an industry, and as individual companies, to guarantee we can continue operating.”

Photo courtesy of O'Hara Corporation

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