Curtis, Rita E.

Hamilton, Marcia S.

Travis, Michael D.

English

Research Papers in Economics

137
Marine Resource Economics, Volume 11, pp. 137–140 0738-1360/96 $3.00 + .00
Printed in the U.S.A.  All rights reserved.           Copyright © 1996 Marine Resources Foundation
Thalassorama
Hawaii Longline Vessel Economics
MARCIA S. HAMILTON
RITA E. CURTIS
MICHAEL D. TRAVIS
University of Hawaii
Introduction
This note describes the results of a multi-year economics research project at the
University of Hawaii’s Joint Institute for Marine and Atmospheric Research
(JIMAR) designed to provide baseline economic information on the Hawaii-based
longline fishery. Longline fishing involves the use of a mainline [2–100 kilometers
(km) in length], which is strung across the ocean’s surface using floats to which
branch lines with baited hooks are attached at intervals. Fishing depth is adjusted
depending on the species targeted (tunas, swordfish, and other pelagic fishes).
Longline fishing by Hawaii-based vessels began in 1917 (Boggs and Ito 1993),
but was severely reduced during World War II and remained low until the mid 1980s
(fifteen vessels). By 1990 the fleet expanded to over 150 vessels due in part to in-
creased export demand for Hawaiian fish (Pooley 1993). Beginning in 1991, fishery
managers imposed a limited entry regime. In 1993 longline fishing permits were is-
sued for 167 longline vessels, 122 of which made at least one landing. This study
focuses on the fleet operating in 1993.
Total 1993 fleet landings, as estimated by National Marine Fisheries Service,
were 25 million pounds, with an ex-vessel value of $55 million. Hawaii-based
longline vessels fished in an area between 125 km and 3,500 km from Honolulu,
with fishing effort roughly split between the inside and the outside of Hawaii’s 200
mile Exclusive Economic Zone (EEZ) (Dollar 1994). The major species targeted
were swordfish (52% of landings by weight), and tunas (29% of landings). Miscella-
neous other pelagic species include marlin, mahimahi, and wahoo and comprised
19% of landings. This report provides a summary of 1993 vessel operations and
earnings; information on other years will be available in the near future.
Methodology
Personal interviews were conducted during the summer of 1994 with the owners
and/or captains of ninety-five of the 122 active Hawaii-based longline vessels. A
survey of approximately seventy-five questions was administered, primarily focus-
ing on vessel characteristics and costs. Catch, revenue, and operating information
Marcia S. Hamilton is research associate; Rita E. Curtis is research associate; and Michael D. Travis is
assistant researcher at the Joint Institute for Marine and Atmospheric Research, University of Hawaii,
Honolulu, Hawaii 96822 USA. Hamilton’s e-mail: mhamilto@honlab.nmfs.hawaii.eduHamilton, Curtis, and Travis 138
was extracted on a per vessel basis from a combination of State of Hawaii catch re-
ports and federal logbooks.
Based on interview data, the fishery was categorized into four categories1 according
to vessel target: (1) TUNA indicates every trip (and set) targeted tunas, (2) MIXED indi-
cates every trip (and set) was “catch whatever you can,” (3) SWORD indicates every
trip (and set) targeted swordfish, and (4) VARIED indicates target varied by trip.
Results and Discussion
Analysis by Target Species
Of the 122 vessels active in 1993, one-third targeted tuna, one-third had a mixed tar-
get strategy and 20% targeted swordfish (table 1). Tuna and swordfish longliners
represented two ends of a spectrum in terms of vessel horsepower, gross tons, total
investment (purchase price plus additional investment), number of trips, travel days,
fishing days, and catch per trip. Mixed and varied target vessels fell in the middle,
with mixed vessels tending to be larger, but with lower levels of investment.
In terms of annual revenue and variable costs, tuna and swordfish vessels were
again at the two extremes (table 2). Variable costs were higher for swordfish boats, be-
cause in addition to traveling farther to their fishing grounds (higher fuel costs) and
making more sets (higher quantities of bait), they also used a more expensive type of
bait and utilized a larger number of lightsticks to attract the fish to the bait. Mixed boats
had the lowest fixed costs, and swordfish boats had the highest. Several of the factors
that contribute to high fixed costs are related to vessel value including loan payments,
insurance costs, and depreciation charges. The mean value (purchase price plus addi-
tional investment) for mixed vessels was 40% less than that of swordfish vessels.  Mean
annual net returns were highest for mixed boats and lowest for varied target boats.
A comparison of means to medians for net returns revealed that the distribution
1 Two vessels which varied their target species by set are omitted from the analysis.
Table 1
 Mean Vessel and Operating Characteristics by Target
Vessel Target
Tuna Mixed Sword Varied
N 4 14 12 6 3
Vessel length (feet) 60 75 72 64
Gross tons 65 109 118 91
Total horsepower 342 519 566 362
Purchase pricea $172 $236 $446 $277
Additional investmenta $133 $84 $94 $110
Value of electronicsa $22 $23 $79 $19
Number of trips in 1993 12.6 10.8 7.7 11.9
Total days per trip 13.8 18.8 32.2 19.6
Travel days per trip 4.6 9.0 18.2 8.9
Fishing days per trip 9.2 9.8 14.0 10.8
Catch per trip (pounds) 12,187 18,811 26,132 12,373
a In thousands of dollars.Thalassorama 139
of net returns was skewed slightly negatively for both tuna and swordfish vessels,
and skewed positively for mixed and varied vessels. Of the thirty-two tuna vessels
surveyed, nineteen had positive annual net returns in 1993; the remaining thirteen
showed negative returns. Within swordfish vessels, eleven had positive net returns
while ten realized net losses. For mixed vessels, twenty-eight had positive annual
net returns and four had negative returns.
Analysis of Economic Highliners
For the purposes of this study, economic highliners were defined as the three vessels
which earned the highest annual net return within a given group. Economic
highliners had higher levels of total investment, larger vessels and more electronics
than did other vessels (table 3). They also took more and longer trips, caught more
pounds per trip and secured higher output prices.
Although the annual variable costs of highliners were higher than those of other
Table 2
Mean Annual Economic Information per Vessel ($1,000)
Vessel Target
Tuna Mixed Sword Varied
Gross revenue 355 566 633 491
Variable costs
Labor 113 135 139 132
Supplies 96 237 252 179
Sales fees 35 57 101 51
Excise taxes 2332
Fixed costs
Insurance 24 16 35 28
Maintenance 22 28 26 27
Depreciation 10 11 18 13
Other 34 32 48 38
Net return 20 47 11 5
Table 3
Comparison of Fleet Highliners to all Other Vessels:
Mean Vessel and Operating Characteristics.
Highliners All Other Vessels
Vessel length (feet) 73 68
Purchase pricea $350 $264
Additional investmenta $47 $108
Value of electronicsa $46 $34
Number of trips 12.3 10.7
Total days per trip 22.1 20.1
Catch per trip (pounds) 27,276 17,699
Price per pound $3.04 $2.81
Gross revenue per tripa $86 $49
a In thousands of dollars.Hamilton, Curtis, and Travis 140
vessels, they were offset by lower fixed costs, higher annual catches, higher output
prices, and higher annual gross revenues (table 4).
Conclusion
This study found that, while the Hawaii longline fleet averaged a positive net return
from their 1993 operations, the level of profits varied substantially between groups
of vessels. When analyzed by target species, mixed target vessels earned the highest
net return. Although the gross revenue earned by this group was less than that
earned by swordfish vessels, mixed vessels had somewhat lower variable costs and
substantially lower fixed costs.
The lowest net returns were earned by varied and swordfish vessels. Varied ves-
sels ranked third in gross revenues as well as variable costs, but encountered high
fixed costs. Swordfish vessels realized the highest gross revenue; however, they also
had the highest variable and fixed costs of all groups. These findings imply that the
role of fixed costs in the ranking of net returns by sector may be more important
than that of either gross revenue or variable costs.
An examination of economic highliners revealed that these vessels tended to
achieve greater gross revenues through higher sales levels, higher output prices and
lower costs. It is this combination of higher revenues and lower costs which distin-
guished economic highliners within every group examined. Additional analyses of
economic dynamics of the Hawaii based longline fishery are ongoing.
References
Boggs, C. F. and R. Y. Ito. 1993. Hawaii’s Pelagic Fisheries. Marine Fisheries Review
55(2):69–82.
Dollar, R. A. 1994. Annual Report of the 1993 Western Pacific Longline Fishery. U.S. De-
partment of Commerce, NOAA, National Marine Fisheries Service, Southwest Fisheries
Science Center. Administrative Report H-94-06.
Pooley, S. G. 1993. Hawaii’s Marine Fisheries: Some History, Long-term Trends, and Recent
Developments. Marine Fisheries Review 55(2):7–19.
Table 4
Comparison of Fleet Highliners to all Other Vessels:
Average Annual Economic Information per Vessel ($1,000)
Highliners All Other Vessels
Annual gross revenue 967 489
Labor 297 123
Supplies 259 185
Sales fees 85 58
Excise taxes 5 2
Total variable costs 646 368
Insurance 18 24
Maintenance 14 26
Depreciation 13 12
Drydock 14 9
Other 29 29
Total fixed costs 88 100
Annual net return 233 21

HAWAII LONGLINE VESSEL ECONOMICS

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