Exporting seafood: With perishable products, time is money

Laurie Schreiber | Mainebiz

Maine’s elver season begins late March when the baby eels begin to arrive after a 1,200-mile migration from the Sargasso Sea.

They’re seeking their inland natal waters, where they’ll grow to adult size. But some will take an unexpected detour to Asia — shipped by Maine fishermen to be raised to adulthood and served in Asian restaurants and homes.

How they get there is one of the logistics challenges faced by the fishing industry, as the fish markets become increasingly global.

At $2.6 million, elver exports are a small segment of Maine’s seafood exports, which had an overall value of $565 million in 2016 and were dominated by lobster. It was the fourth year in a row that seafood was the state’s leading export, according to the Maine International Trade Center.

“The industry develops those markets,” says Jeff Bennett, a senior trade specialist at MITC. “Dealers and processors attend a lot of trade shows overseas and spend a lot of time on airplanes meeting with potential distributors and forming relationships. At MITC, we’ve led a number of state and seafood focused trade missions. In addition to meetings with suppliers and distributors, our state of Maine trade receptions almost always feature Maine lobster on the menu. Those receptions draw distributors, suppliers, media, chefs — and lot of attention.”

Lobster exports accounted for $397.8 million in trade in 2016, with shipments going to Canada, Europe and Asia, according to Dr. Jenny Sun, a marine resource economist with the Portland-based Gulf of Gulf of Maine Research Institute.

Other seafood that’s exported includes urchins (Japan), sea cucumbers (Asia), bloodworms (Europe, used as bait) and farmed oysters (Canada).

Maine seafood’s global migration

Moving seafood around the globe is a constant challenge, whether it’s processed or alive. Long-distance shipping is part of a complex web of logistics.

Dealing in perishables, timely transit and proper handling at all points is essential. Preparations involve compliance with regulations in both the United States and the destination countries, designed to ensure proper harvest, handling, sanitation and documentation throughout the supply chain.

Packaging must achieve maximum protection on journeys that can take several days by truck and air to Europe or more than a month by container ship to Asia. Maine dealers and processors prepare product for shipment — whether it’s thousands of pounds of live lobster packed in specially configured crates, or delicate urchin roe placed in individual trays. They typically truck it to a freight forwarder, a company that handles every aspect of storage and shipping — with documentation, tracking, booking and insurance.

“We book the space on the airlines, we make the health certificate process happen and we truck it to a variety of airports,” says John Kingsley, a perishables manager at OCEANAIR, a Revere, Mass.-based freight forwarder. OCEANAIR handles 30 million pounds of Maine lobsters a year, plus other Maine seafood as well.

Shipping includes a mass of paperwork and scheduling challenges. Airport selection alone isn’t easy, involving routes, capacity, flight frequency, season, quality of carrier, and price — to ensure timely and cost-effective transits. Every market has optimum receiving and distribution days, due to factors like the destination country’s high-demand times of year. The cost of shipping, says Kingsley, can be 10% to 50% of product price, depending on many factors.

“What distance? What type of packaging? What markets?” Kingsley says. “Are there many planes going there and lots of demand? That’s good. Are there few planes there and little demand? That’s not so good.”

Journey of the tiny elver

Maine’s elver harvesters face their own set of challenges. The industry quickly escalated, as demand from Asian buyers skyrocketed. Regulators adapted and, as a result, Maine’s harvesters have a lucrative trade, but face strict quotas.

These delicate baby eels must be kept in good condition throughout their journey halfway around the world. The supply chain depends on proper handling, starting with harvesters and dealers, who hold elvers in tanks filled with oxygenated, temperature-regulated water.

When Patricia Bryant, who runs PB Enterprises in Nobleboro, has enough for shipment, she must notify the U.S. Fish and Wildlife Service within 48 hours of shipment. She then prepares both documentation and the shipments themselves.

The elvers go into a separate tank with water that’s gradually cooled to 44 to 46 degrees.

“They’re packed in cooled water and oxygen in plastic bags,” she says. “Then you put in an oxygen hose, blow up the bag with oxygen and seal it. That will keep the temperature. You put the bags in perishable shipping boxes lined with half-inch Styrofoam liner, put in frozen gel packs, and send them out. If the water is cooled and eels are cooled, they’re good for approximately 48 to 56 hours.”

With the clock ticking, and various stops before Asia, Bryant trucks the packaged elvers to OCEANAIR.

“Our cutoff time was always 11 a.m., because the boxes have to be X-rayed,” she says. At OCEANAIR, they’re loaded on a refrigerated truck and taken to New York’s John F. Kennedy International Airport, a 220-mile, three-hour and 45-minute drive under the best of circumstances.

Bryant has longstanding relationships with overseas buyers, and word of mouth keeps them coming.

Once the package is received, the buyer’s representative takes the elver shipment to a tank house and removes dead elvers. Bryant’s contracts include a 3% mortality variance, but usually, she says, 99% arrive alive. From there, the eel farmers pick up their orders.

Bryant is paid up front, before the elvers are shipped. Shipping costs range from $125 to $150 per kilogram, including packaging, labor and transportation. A kilogram is about 2.2 pounds. Shipping averages 4% of a typical per-kilo payment of $3,500. She pays 75% to the harvesters. Her costs include water weight loss between harvest and packing.

“You’d like to have your profit margin be 20%,” she adds. “You hope for the best.”

How the sea urchin finds its way to Japan

Urchins are another high-value export, their roe a delicacy in Japan. Although the resource crashed in the late 1990s, the harvest rebounded somewhat, and was 2 million pounds in 2016. Buyers meet harvesters at the dock and transport the hauls to processors in Portland or Scarborough. The processors crack the urchins and scoop the roe.

“It takes a lot of manpower to process urchins,” says Sinuon Chau, who runs East Atlantic Seafood in Scarborough and employs around 20 people. “You have to be very careful. The roe has to be intact.”

The roe goes into individual plastic or wooden boxes. They’re then stacked into perishable-food boxes with frozen gel packs. Like elvers, Chau must notify the Fish and Wildlife Service within 48 hours of shipping. The shipment is flown from Boston’s Logan Airport to New York and then on to Tokyo. The customer pays shipping costs. But delays can affect Chau’s payment.

“The roe has a shelf life of one week or less, so any delay in New York, the quality goes down,” he says. “That affects the price we get.”

Large-scale lobster shipments

While lobster is shipped on a far larger scale, the issues are similar, says Annie Tselikis, marketing director for York-based Maine Coast and executive director of the Maine Lobster Dealers’ Association.

Most lobster dealers operate on a tight 5% to 10% profit margin.

“So experiencing any problem along the way — issues with a tank, a truck breaks down — has a huge impact on the way dealers are able to do their business,” Tselikis says.

Live lobster moves quickly. “Say they bring lobster into the facility on Tuesday afternoon,” she explains. “They’ll grade it for size and quality, then usually let it sit overnight in their tanks, then typically pack it the next day or so. You want to buy lobster strategically so you’re anticipating sales and market conditions.”

Lobsters are packed, tail down, into perishable containers typically divided into individual compartments, fitted with frozen gel packs and a moisture medium such as wet pads or seaweed.

“You want to mimic the environment ideal for holding lobsters, because they’ll be out of the water from 10 to 40 hours as they ship around the world,” she says.

Shipments go either to freight forwarders or the airline itself. Competition for cargo space can be fierce, especially during the holidays. Flight time to Europe is about six hours and 13 to 14 hours to Asia, though time is affected by factors like weather, the route and customs on either end of the journey. Many dealers install temperature monitors to register any increase, in case of dead arrivals. It’s hard to tell how often the problem occurs, she says.

“But things do go wrong,” says Tselikis. “We’re shipping live and perishable lobster products around the world. That’s why high quality is so important.”

Processed lobster’s long journey by sea

Dealing in processed lobster largely shipped by sea — from Portland and Boston to Europe and from Seattle to Asia — Calendar Islands Maine Lobster in Portland packages product in a system of insulated pallets with dry ice and refrigerated containers, using temperature monitors to withstand longer transits.

“It’s all temperature-sensitive and you can’t miss a beat,” says Emily Lane, a vice president of sales at Calendar Islands Maine Lobster.

While everyone agrees seafood shows, trade missions, and networking are key to building markets, Lane takes relationship-building to a new level when she also brings international chefs and distributors to Maine.

“I take them out on a lobster boat and to processing facilities and buying stations where they can see lobsters being purchased and held and shipped. Then I take them to restaurants so they can see how lobsters are served in the United States,” Lane says.

Lane then takes them to Vinalhaven, her hometown, “so they can get the full picture of the industry and the communities lobstering supports. It’s about selling Maine, selling the sustainability of the Maine coast.”