When shipping live lobster, faster is usually better. Most lobster exporters dream of finding the most direct flight into Spain or the quickest customs line into China.

But a company with roots in the Canadian fishery thinks the future of lobster exporting lies in going slower, not faster. Live Stor America wants lobster dealers to ditch the expensive airplane trips and use its irrigated, refrigerated crate and container system to literally ship their product to Europe and Asia. Although it takes a lot longer, ocean transit using this system costs less than flying, and the number of lobsters that die in transit is much lower, the company says.

“We think this is going to revolutionize the lobstering industry,” said Allan Gillis, a partner in the storage, shipping and crate and container companies that are espousing the idea.

The idea has met with some skepticism from dealers, who say the price volatility and fragile biology of exporting live lobster requires speedy deliveries.

But Gillis believes the industry will come around when he brings the concept to Maine. Live Stor America is scouting for a location in southern Maine to build its first U.S. holding and distribution hub, where lobster bought from dealers in Maine would be stored in high-tech, remote-monitored crates and containers until they are moved by forklifts onto trucks, train cars and cargo vessels bound for the U.S. West Coast, Europe and Asia.

SUCCESS WHERE OTHERS HAVE FAILED

The idea of shipping live lobster in tanks has been in the works for years, but never perfected, said Annie Tselikis, director of the Maine Lobster Dealers Association. The French container shipping giant CMA CGM is trying to bring its version of a lobster container to market, with lobsters hand-loaded into horizontal tubes inside foam cases stacked in a container outfitted with an oxygenation and filtration system. Maersk, the largest container ship operator in the world, tried to develop a live seafood shipping container, too, even doing some test runs, but appears to have abandoned the idea, selling off that insolvent division to creditors, documents show.

Gillis believes his technology will succeed where others have failed. Each of his containers holds almost five times as many lobsters than his competitors’ containers, and far less water, which means customers will be paying to ship lobster instead of water. His containers require less direct handling of lobsters, which reduces the labor cost and stress to the lobster, he said. Chilled-out lobsters live longer, and arrive healthier.

SHIPPING VERSUS FLYING

Gillis’ system works like this: lobsters are placed tail-down in honeycomb-shaped plastic “girdles” inside crates that mimic the rocky burrows of the sea floor and prevent them from killing each other. The crates are stacked in irrigated, chilled shipping containers, with temperature, water level and oxygen engineered to keep lobsters docile. With the same container used for storage and shipping, the lobsters can be moved without being touched, which reduces stress, mortality and labor costs.

The system is designed so that lobsters stored in floor-level crates have exactly the same amount of oxygen, water flow and temperature as those at the top.

Gillis claims lower labor costs, the relatively cheap cost of shipping and lower mortality rates mean he can ship a Canadian lobster to China for about $1 Canadian per pound, or half the price of air freight.

And he believes he can ship a Maine lobster to China for half the $1.50 in U.S. currency it costs to fly them there. He would put the containers on trucks and train cars and send them to the U.S. West Coast, where he would load them on ships bound for China.

Regarding mortality rates, Gillis said lobsters flown by plane are usually laid flat, one on top of the other, in crates packed with ice to keep them cold, dormant and wet enough to survive the 24- to 48-hour trip from boat to plate. A Nova Scotia lobster is touched 30 times, on average, between the time it is caught and when it is cooked, Gillis said, with each touch adding to the lobster’s stress. His shipping method requires just five touches.

He has yet to test his concept on the open ocean, but in road trials with cargo containers full of lobsters on the backs of flatbed trucks headed to Texas and Florida, fewer than 1 percent of his lobsters had died after 53 days in transit. Air freight mortality rates range from 3 percent to 8 percent, depending on destination and season, according to Maine dealers interviewed for this story.

The low mortality rate makes Gillis’ storage and shipping method ideal for weak-shelled lobster like Maine’s new shells or those caught in Northumberland Strait, the warm stretch of sea sandwiched between Nova Scotia and Prince Edward Island, which is where the crate designer fishes for lobster, Gillis said. It would allow dealers in Maine to store their product with Gillis until the price goes up.

PLAN FOR HUB IN PORTLAND AREA

In Maine, the bulk of the product stored and shipped would likely be lobster, which is the state’s biggest export, but Gillis said Live Stor America can use the same technology, storage facility and shipping methods for as many as 30 different species, including high-value Maine exports such as elvers and those that could grow their global market share, such as mussels, oysters and green crab.

Live Stor America plans to work with a local fisherman and lobster dealer to test a 3,500-pound holding system in Maine over the summer, Gillis said. Once the technology has been proven, the company plans to build a million-pound holding facility and distribution center in the Portland area, eventually hiring a half-dozen people to run that hub. He hopes to begin construction next year. Live Stor’s Canadian counterpart is already building a 250,000-pound holding facility in Nova Scotia.

Even if the technology works as advertised, lobster dealers may not be quick to embrace the concept because of pricing, cash flow and insurance challenges.

In an industry like lobster, where dock prices can change as often as two times a week, a dealer would have a hard time developing a pricing matrix for lobster that could hold for 30 days, which is how long it might take some shipments to reach Asia, said Scout Wuerthner, who manages the lobster sales division of Inland Seafood Corp., which has a facility in South Portland.

Even if both parties could agree on a price that would hold, or some range, neither would want to be the one to front the deal – the seller wouldn’t want to ship before getting paid and the buyer wouldn’t want to pay for the product nine to 12 weeks in advance. That kind of extension of capital or credit just doesn’t happen in the industry, said Brendan Ready, one of the founders of Ready Seafood, a live lobster shipper based in Portland.

While it may be slower than flying, the kind of ocean transit that the Live Stor network is bringing to market will not take as long as Maine dealers think it will, Gillis said. Transport from Maine to Shanghai using road, rail and sea container shipping from the U.S. West Coast can be done in less than 20 days, he said. Transport to England and Europe can be done in a week to two weeks, depending on the carrier used and the end destination, he said.

Dealers also worried about insurance. It’s hard enough to ensure frozen processed lobster, much less a live animal that will spend a month at sea in a box, they said.

“I don’t think our customer base would be a fit for this, as prices change daily and it would be tough to convince a customer to pay a certain price and receive the lobsters nine to 12 weeks later considering prices could potentially drop,” Ready said. “That being said, we shouldn’t shoot down the idea. I just don’t think it will fit the Maine lobster industry well, but it’s exciting to see any new innovations that could maximize our resource for both customers and harvesters.”

His brother, John Ready, put it this way after talking to Gillis this month: “Interesting idea, but it seemed a ways from commercialization.”

SKEPTICISM OVER FRENCH VERSION

Tangier Lobster, a fourth-generation live lobster exporter from Nova Scotia, has been waiting to test the CMA-designed container, called the Aquaviva, for a year, but the promised generator required to wire a test lobster container into the Tangier facility has yet to arrive. While he wants to give it a go, manager Stewart Lamont agrees that the live lobster shipping technology offered by Aquaviva is not yet workable for the lobster business model.

Lamont says Aquaviva would save him just 10 percent on shipping, but take 45 days to get to Asia as opposed to 36 hours by air.

“Why in the world would we ship by ocean unless the cost savings were incredible? That is the question that thus far we have not been able to get around,” Lamont said. “CMA/CGM is terrific, but they have developed a business model without properly doing analysis for live lobster costing and without being able to carve out a profit. I think they assumed if we built it we would come. … The container may perform admirably, but the business model is impossible.”

Penelope Overton can be contacted at 791-6463 or at:

poverton@pressherald.com

Twitter: PLOvertonPPH

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