Reports

Investment management in freezer trawler operations

Published:

01/05/2014

Authors:

Gunnar Þórðarson, Arnljótur B. Bergsson, Gísli Eyland, Jónas R. Viðarsson, Sigurjón Arason, Sindri Magnason

Supported by:

AVS Fisheries Research Fund. Reference No .: S 12 007‐12

contact

Gunnar Þórðarson

Regional Manager

gunnar.thordarson@matis.is

Investment management in freezer trawler operations

There has been a major change in the freezer trawler industry in Iceland since it began in the early 1980s. The share of freezer trawlers in cod has decreased significantly and today it is only caught as a by-catch when fishing for other species such as redfish, saithe and halibut. In 1992, there were most freezer trawlers in the Icelandic fleet, 35 in number, but today there are only 23 and the number is decreasing. The reasons for the declining share of freezer vessels in the cod fishery can be traced to higher oil prices, but the energy cost of freezing at sea is much higher than comparable costs on land, higher labor costs for processing at sea than on land and changes in marketing where fresh fish has recently returned one of the greatest value creation in the Icelandic fishing industry. The most important operating aspects of freezer trawlers today are catch quotas, catch value, fishermen's wages, oil prices and fishing fees. The imposition of fishing fees has created uncertainty and reduced the efficiency of freezer trawlers, which has prevented investment in the industry, as well as a share-based system that does not encourage investment in technology or product development. Freezer trawlers are necessary for Icelanders, and although their share of cod and haddock has decreased, it will still be economical to fish other species with processing vessels. Species such as redfish and halibut are well suited for processing such as this, and distant targets will hardly be retrieved except with freezer trawlers.

Significant changes have occurred in operation of freezing trawlers in Iceland since it began in the early eighties. Its share in the most important stock, the cod, has declined significantly and today cod is only caught as by ‐ catch with other species. The main species caught by and processed on ‐ board freezing trawlers today are; redfish, saithe and Greenland halibut. In 1992 the number of freezing trawlers peaked in the Icelandic fishing fleet, with 35 vessel, but has declined to 23 today. Reasons for the reduction are mainly higher oil prices, higher energy cost of freezing at sea than onshore, relatively higher salaries of processing offshore and changes on markets where fresh fish portions have recently delivered better value than see ‐ frozen fillets in the Icelandic fishing industry. The most important operating parameters for freezing trawlers are quotas, catch value, crew remuneration, fuel cost and fishing fee. Imposition of fishing fees in Iceland have caused uncertainty and reduced profitability of freezing trawlers and prevented capitalization in the industry, along with crew salary ‐ systems that do not encourage investment in technology or product development. Freezing trawlers are necessary in Icelandic fish industry, though their share of the cod and haddock have declined it remains profitable to catch other types of species, such as redfish and Greenland halibut and these vessels are vital for the Icelandic deep sea fishing around Iceland and in the Barents see.

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