Jones Act Support - Fishermen's Finest

Fishermen's Finest: Argument US Vessels are too expensive to build is 'nonsense.'
by  Undercurrent News

US fishing companies are subject to the Jones Act, which controls coastwide trade within the US and determines which ships are legally able to engage in that trade.

The act requires that a certain percentage of the boat be built in the US, rather than being outsourced to countries where labor is cheaper, which makes US vessels relatively more expensive to build.

This is often cited as a significant impediment to American companies to replace their aging vessels, something that is increasingly becoming an issue.

Moran, however, said that the Jones Act is not as restrictive as many companies say.

"That's an excuse given by companies who want to not build for other reasons," he said. "The capital return is long period. You take your cash flow from the fishery and put it into a new ship, you don’t get to pay out profit dividends for about 10 years. Owners look at that and say 'I don’t want to do that, I’m only going to be in this business another ten years anyway, why would I give up my dividends?', and that’s what driving this, it’s short-sighted.”

Moran said that a handful of years ago, he also would have agreed with other companies who say that building a vessel in the US was restrictively expensive.

"I started with the other perspective at the beginning. I thought, 'my God, this Jones Act is terrible, it's preventing us from doing this', but having spent the time personally putting this whole project together...when it's all [done], I think we actually come out better," he said. "As I've gotten into the project and I've seen firsthand how these things get done...I recognize that [initial cost] is not a big impediment."

One major reason, Moran said, is that the US Pacific fishery allows fishing on a greater scale.

"The quotas we fish up in the Bering Sea are so much larger than the quotas that are fished elsewhere in the world. So if you take our new boat, which is going to cost about 10%-15% more than a foreign model...[and take into account that] the amount of fish we'll catch in out US waters is about 50%-60% more, we get a greater economy of scale," he said.

"We pay a little more up front, but our product is better too."

Moran added that boats built for US companies are built to last longer, as there tends to be less turnaround.

Far from arguing building a new vessel in the US is too expensive, Moran said that now presents an opportune time for companies.

“We in the fishing business, we have this window of opportunity and we’re blowing it. And here’s the window: we have super low interest. We have banks dying to loan money for new boats,” he said.

Part of the problem, according to Moran, is poor regulation from the coast guard, which he said fails to put enough pressure on companies to build new vessels by turning a blind eye to vessels that should no longer be on the water.

"You'd think there would be increasing pressure to replace the fleet, but there's not, there's increasing canoodling to keep the old fleet at sea," he said.

Fishermen's Finest started planning the new vessel in January 2013 and started building it in June of last year. Moran said the boat is scheduled to be finished in November 2017.

The vessel, which will be 264 feet long, 51 feet wide and 22 feet deep, will cost about $70 million to build and is being designed by Norway-based Skipsteknisk and Seattle-based Elliot Bay Design Group.

The new design, Moran said, will focus on reducing halibut bycatch, cutting carbon footprint by 80%-90% and reduce injuries by 85%, in addition to other innovations.