Maine’s Owner-operator Management System a Success

A quiet man lobsters out of Owls Head. His boat is new, to him, a refurbished 46-footer bought to fish offshore. He started lobstering when he was a child, graduating from a skiff to a boat with a hydraulic hauler and then, over the years, to progressively larger vessels. At first he fished alone. As he paid off the boat debts and ventured further offshore, he took on first one, then two sternmen. He lobsters throughout the year, with some time off during the depths of winter when the weather is too nasty to haul. He is young, under forty, with a wife, two children, and a house free of mortgage.

Maine’s lobster fishery is based on a one-man, one-boat structure.

The Owls Head lobsterman, who asked to remain anonymous, takes quiet pride in his achievements. He is, as the phrase goes, a self-made man. And he is just one of thousands of such men and women operating throughout the coast of Maine, individual small business people who collectively pump nearly a half billion dollars directly into the state’s economy each year.

Maine’s lobster fishery stands out among other highly profitable commercial fisheries because it is undertaken by individuals, owners of their own boats who are required to operate that boat themselves. “Many other fisheries are much more consolidated,” said Joshua Stoll, associate professor of marine policy at the University of Maine. “Take the New England groundfishery. There are several hundred boats involved but the [fish] quotas are held by just a couple of companies.”

In the business world, many companies are vertically integrated, meaning they own several stages of the production of a product. The Alaskan pollock fishery is an example of a fishery largely dominated by big, vertically integrated corporations. Trident Seafoods is one such company. It began in the 1970s with one crab vessel. During the 1980s, Trident Seafoods focused on pollock, which was taking off in demand as a component of fast food restaurant menus, expanding its fleet and building its own processing facilities. Eventually Trident owned and operated more than 40 catcher/processor vessels and trawlers, 16 processing plants and held allocations for vast amounts of the Alaskan pollock quota.

The benefit of vertical integration, according to economists, is that it offers greater economic efficiency due to economies of scale and to the fact that all aspects of production are managed and owned by one entity. Opponents of vertical integration say the question is not one of economic efficiency but of equity and cultural tradition.
Lobstering in Maine is often a multi-generational pursuit. Lobstermen, particularly those located in Downeast Maine, fish from small, isolated harbors. Other ways of making a living are limited. Each person is his or her own boss, who determines when to fish and how to fish, and reaps the profit of their own expertise.

Little Bay Lobster, based in New Hampshire, is an example of a vertically integrated lobster company. The company, run by Jonathan Shafmaster, owns and operates 13 offshore lobster boats. The company owns a buying wharf in Stonington, as well as a large processing facility and a fleet of trucks for transporting its products. From the trap to the truck, all aspects of production are within one company.

Maine-based Luke’s Lobster, on the other hand, does not own its own boats. Rather the company contracts with lobstermen for their catches. The business began as a series of lobster shacks based in New York City and rapidly expanded its range throughout the country. In 2013, Luke’s Lobster opened its own seafood processing facility in Saco. It buys lobster from independent lobstermen, then processes and sells its own products through its lobster shacks and through grocery store chains. In 2020 it moved into e-commerce, offering its prepared seafood products to consumers directly.

“Maine has been very intentional in making the lobster license non-transferable,” Stoll said. The state has rejected many attempts to allow for the sale or transfer of licenses, or for one person or company to own or operate more than one vessel. And with good reason. The profits from Maine’s owner-operated fleet are spent locally in Maine’s rural, coastal communities, serving as the economic base for the coastal economy. “The state of Maine has shown an explicit interest in maintain the fishery and communities,” Stoll continued. “From a purely economic standpoint, the fishery is inefficient. But there’s nothing inefficient about keeping rural people employed and doing what they love. What’s wrong with that?”

As Maine grapples with what future holds for the lobster industry under a 98% risk reduction goal mandated under NMFS’s 10-year whale plan, industry leaders worry that this successful business model could be at risk. “You’ve never needed to come from money to make it in the lobster fishery. If you are willing to learn the trade and work hard, you can slowly build a successful business and support a family,” said Patrice McCarron, Maine Lobstermen’s Association executive director.

McCarron worries that if ropeless fishing becomes a reality, there will be significant financial, technological and operational barriers to entering the lobster fishery. “The days of getting a small skiff and building up will be lost forever,” explained McCarron. “Creating a fishery that is dependent on expensive technology and equipment will create winners and losers.” She believes that the bigger boats with money will win and the smaller operations will lose. “How long will it take for the big boats to buy out the small boats and consolidate the fleet?”

Share This Story:

Leave a Reply

Your email address will not be published.