Air transport of Nova Scotian lobster an issue

First published in The Vanguard, January, 2015. Reprinted with permission in Landings, February 2015.

There’s a growing hunger for Atlantic lobster in Asia but fishermen and shippers from southwestern Nova Scotia face a monumental challenge – how to get it there. Last fall, the Zhangzidao Group, a Chinese seafood giant, purchased a lobster processing plant in Eastern Passage. Its subsidiary – Capital Seafoods International – will be exporting up to 10 million pounds of lobster in the near future. The new owners hired 50 new employees and are turning the plant from a seasonal to a year-round operation, spending between $1.5 and $2 million on upgrades.

John Crandall Nickerson is the Atlantic Canada manager of operations, sales and procurement for the Zhangzidao Group. Marc Surette is the Atlantic Canada manager of logistics, administration and fisheries policies.  They spoke to The Vanguard from their office in Lovitt Plaza on Main Street in Yarmouth [Nova Scotia]. Nickerson says the location of the Eastern Passage plant was a critical factor in the exporter’s decision to buy.

“Eastern Passage is logistically only 20 minutes from the airport,’ he said. “They can haul lobsters out (from holding) and be there packed in three hours. Down here it’s going to take you at least four hours to get to the airport and then a few hours to get them out and packed so you’d be looking at seven hours versus three. That four hours might not mean much to some people but to a live product that has exhausted itself in 50 hours, it can make the difference between a five per cent mortality or 10-12.”

Having shipments arrive on time is especially important when the product is live, says Surette. “Bad weather can wreak havoc. The trucking route is a last resort,” he said.

When someone approaches him, trying to get him to commit several days ahead to putting 35,000 pounds of lobster on a truck, he’s not interested… unless someone wants to guarantee to take care of them once they’re on the truck. A full truckload of lobster is a quarter-of-a-million bucks. “If we can find any way to get the wheels off the ground in Halifax, or even Moncton (a minimal option), we’ll do that,” he said, referring to air freight.

Geoff Irvine, executive director of the Lobster Council of Canada, has concerns about the capabilities of Halifax Stanfield International Airport when it comes to shipping lobster. “It’s just not a big enough airport,” he said. “They don’t have enough people and enough freight for the airlines to bring in consistent freighters. That’s why the shippers do a lot of trucking to Boston, Montreal and Toronto with the product to take advantage of those bigger airports.”

Under the new Canada-Korea Free Trade Agreement, current duties of up to 20 per cent on lobster products faced by Canadian exporters will be eliminated. Seoul, South Korea has a population of 10 million and fresh seafood is a favourite staple. “It’s a great opportunity with the new trade deal,” said Irvine. “It only stands to reason that we’ll send more lobster there.”

Korean Air began flying lobster to Seoul from Halifax November 30, 2014, with a flight each Sunday until December 28. Most flights carried 100 tons of product. The airline supplies seasonal freight service. “It’s only when the demand is high enough,” said Irvine. “We’re hoping they’ll stay, doing that. But it’s all a supply-and-demand business in air freight, just like it is in lobsters.”

Irene d’Entremont, a well-known francophone entrepreneur and community leader, is a director on the Aerospace and Defense Industries of Nova Scotia board and has represented the Yarmouth International Airport in a volunteer capacity for many years. She says the airport commission is working on several opportunities but is not ready to divulge the subject(s). “We are looking at different projects and my talks are with the aerospace industry,” she said.

Irvine, meanwhile, says a lobster marketing initiative is planned for the future. Its implementation is dependent on industry funding and legislation pertaining to a two-cent industry levy.

According to the Canadian government’s foreign affairs, trade and development website, Atlantic Canada’s exports of lobster were worth $904.6 million and accounted for 95 per cent of all Canadian lobster exports in 2013. If Asian demand increases as expected and the problem of air transport from southwest Nova is solved, the local economy could benefit tremendously, says Marc Surette. “Stats from the Department of Fisheries for last season, at 90 per cent of the reporting in from LFA 34, was a landed value to the boats of $250 million,” he said. “That’s up over $100 million in the last 10 years. We’ve got to get them having a taste for it. And it’s working.”

Surette added that more education must be provided to potential consumers of Atlantic lobster. To do that, Zhangzidao has hired Egg Studios in Halifax to film a documentary, with Chinese subtitles, about the lobster fishery. The company will be showing the film to its 6,000 employees (it operates eight seafood holding facilities worldwide, including two in China, and has 22 subsidiaries.) Plans are also being made to have a Chinese TV station air the film.

“We’re hoping this documentary in China will help explain the lobster fishery to 1.4 billion people that love their seafood. With the information over there we can increase demand. But we can’t benefit until we can increase the volume that we can ship, and not just for our company, for every company,” said Surette.

Zhangzidao plans on spending up to $5 million more on another holding facility, likely in southwestern Nova Scotia. “It’s still a possibility if we are to buy a piece of land,” said Nickerson. “My preference would be Yarmouth Bar area but it might be a facility already in operation with a $1-$2 million expansion added to the existing infrastructure. Nickerson says the community has to reach out to Zhangzidao executives about the Yarmouth airport. “People are waiting for others to knock on our door. We have to start knocking on doors ourselves.”