Fishing Vessel Construction Work Surges

By Steve Wilhelm, Puget Sound Business Journal – November 9, 2012

A wave of new fishing vessel construction is buoying Western Washington shipyards, with promise of more to come.

The new work is sparked by strong prices for fish, an aging fleet that’s ripe for replacement, and regulatory and legislative changes that make replacing the aging vessels possible.

“We’re seeing an incredible amount of excitement, in all sectors of the industry, about the possibilities of recapitalization,” said Peter Philips, president of Seattle Marine Business Coalition, an industry advocacy group. “And what’s even more exciting is, it’s actually happening — it’s actual steel being cut and workers being hired.”

The resurgence of fishing boat construction is expected to bring jobs to Puget Sound shipyards and suppliers and strengthen the state’s large fishing companies, most of which operate in Alaskan waters. Construction of a fishing vessel can employ 100 shipyard workers and carry a price tag of $25 million or more. Several Puget Sound fishing companies have signed contracts to have ships of this size built, or are on the verge of doing so.

To some degree, the new work also is replacing luxury yacht construction, which has yet to recover from the Great Recession.

The key types of fishing boats being built, or in line to be built, are large factory longliners, which mostly catch cod; large catcher-processor trawlers, which primarily catch other groundfish; and a new wave of 58-foot seiners, which primarily catch salmon but can be used in other fisheries.

One example of the work is the 184-foot Northern Leader, a longliner that will launch from Tacoma’s J.M. Martinac Shipbuilding Corp. in January. About 100 people are employed building it. The vessel is worth about $27 million, according to Martinac President Joe Martinac Jr.

Vigor Shipyards, which is headquartered in Seattle and Portland, is building another longliner in its Ketchikan, Alaska, shipyard.

Meanwhile, Blue North Fisheries LLC, also based in Seattle, is poised to order a 190-foot longliner and will award a contract, for $25 million to $30 million, in the first quarter of 2013, said Blue North CEO Kenny Down.

Down, who is also past executive director of the Freezer Longline Coalition, said 40 is the average age of the fleet of comparable vessels and about three-quarters of them need replacement. There are 28 in the fleet.

“Over the next dozen years, there will be one or two of these vessels under construction almost continually,” he said. “It’s going to be an excellent business for the Pacific Northwest, and will put a lot of people to work.”

At the other end of the size scale, several Seattle shipyards, including Delta Marine Industries and LeClercq Marine Construction Inc., are building 58-foot seiners, the maximum size allowed by Alaska law.

“You’ve got a dearth of good available boats for sale, the economic situation, relatively good fish prices, and I think those two factors are both contributing toward new boat building, which really we haven’t seen very much of in the last 12 to 15 years,” said Bob Kehoe, executive director of the Purse Seine Vessels Owners’ Association in Seattle. “As salmon prices continue to be high, there’s a demand for those boats.”

For Sam LeClercq, vice president of LeClercq Marine Construction, the opportunity to build the seiners has been a boon, compensating for the virtual disappearance of demand for the mega-yachts that had been the shipyard’s mainstay.

The shipyard is building one seiner, with requests coming in for more. The new vessels are wider than earlier seiner designs, allowing owners to use them for fisheries other than salmon, including crab and groundfish.

“We have the potential and interest to do a whole new series of fish boats,” LeClercq said. “I think there are quite a few yacht builders looking at the commercial market.”

Reflecting the new focus on the commercial market, LeClercq Marine Construction will have a booth at the Pacific Marine Expo, Nov. 27 through 29 at CenturyLink Field, for the first time in a dozen years, LeClercq said.

The new demand also is generating work for ship designers.

Jensen Maritime Consultants, which specializes in commercial vessels, is busy with multiple design contracts, said Jonathan Parrott, vice president of new design development.

“We’ve got two longliners under construction right now that we designed, several more under discussion, and the same with factory trawlers,” Parrott said.

Replacement of the aging fleet of groundfish trawlers is being delayed by a regulatory fight over whether or not surplus vessels from the pollock fishery will be allowed to convert to go after other groundfish.

The North Pacific Fishery Management Council will consider the question early next year.

If the change is approved, it would discourage current groundfish quota holders from building new vessels, said Lori Swanson, executive director of the Groundfish Forum, which represents five companies fishing for non-pollock groundfish.

Seattle-based Fishermen’s Finest Inc., which operates two groundfish vessels, has developed a design for a 215-foot catcher processor trawler to be named America’s Finest and is negotiating with a shipyard for construction, but is holding off until the dispute is resolved.

“Certainly before a commitment to actually build a $40 million investment, we want a resolution,” said Dennis Moran, counsel for Fishermen’s Finest.

Kristian Uri, general manager for Fishermen’s Finest, said the ship likely would be built in the Pacific Northwest.