Before jets, coffee and software, boats brought us windfall

Before software, coffee beans and 747s, Seattle's economy was buoyed by crabs. These succulent crustaceans -- along with their silver-scaled brethren, the salmon, cod and halibut -- helped build up Seattle when Microsoft, Starbucks and Boeing were younger or not yet born.

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Now Seattle-based vessels, processors and suppliers have about $1 billion invested in Alaska crabbing. In return, crabbing pumps many millions of dollars of revenue into the Puget Sound region every year.

The size of that revenue bump is variable and necessarily unclear, mainly because the catch size shows peaks and troughs as dramatic as the Bering Sea in winter, said Washington State University professor Scott Matulich. Despite that volatility, it's clear crabbing is "extremely important" to Seattle and Washington, Matulich said.

"Though the resource resides off the coast of Alaska, the economic engine behind crabbing is anchored in Puget Sound," said the professor of agricultural and resource economics.

Most Washington crabbing activity centers on the Fishermen's Terminal area in Seattle, but it extends along both sides of the ship canal, around Lake Union, along 15th Avenue in Queen Anne and along Elliott Bay near Pier 91.

It all began in Ballard, where commercial crabbing "evolved out of a sort of gold-rush mentality" in the 1960s, said Gordon Blue, a longtime crabber and president of The CRAB Group, which represents 110 crab boats, most of them based in the Puget Sound area.

The rush developed, Blue said, after the sardine fisheries were exhausted early in that decade. Consistent crab yields, up dramatically from those just a few years earlier, offered the prospect of handsome profits.

So fishermen from Tacoma, Seattle, Bellingham and Edmonds used the small wooden sardine boats to cruise the 1,500 miles up to Dutch Harbor, Alaska, the jumping-off point for the crab grounds.

Now, of the 250 boats that regularly seek crab in two key areas -- the Bristol Bay red king crab fishery and the Bering Sea snow crab, or opilio, fishery -- about 140, or 55 percent, are berthed in the greater Puget Sound region, said Arni Thomson, executive director of the Alaska Crab Coalition, a Seattle-based boat owners' group.

Another 16 boats, most of which are based in Seattle, hunt in a smaller area called the Aleutian Islands brown crab, or golden king crab, fishery.

Many of these boats are berthed at Fishermen's Terminal.

The take's value from all three fisheries to Puget Sound boats declined steeply from 1996's $131.5 million to 2000's $48.4 million, but it's expected to climb this year to $73 million, according to projections by the coalition.

In 2002, that averaged out to $464,300 per Puget Sound boat. But the high expenses associated with crabbing reduce net income per boat to about $100,000 in an average year, Thomson said.

Most of the boats, which cost between $1.5 million and $3 million each, carry a crew of six. Often the crew members are local residents who collectively take about 35 percent of the boat's gross take, he said.

The expenses incurred by crab-boat owners benefit many other Puget Sound-area businesses. Under the open-access, or derby, model of crabbing that may be phased out this year in favor of a quota system, each crab boat in the Puget Sound fleet spends roughly the following amounts annually:

$50,000 for protection and indemnity (liability) insurance, through companies such as Seattle's Aon Consulting and Sullivan & Curtis Insurance Brokers of Washington LLC.

$60,000 for insurance on the hull and machinery, mainly through local insurance pools.

$7,000 for bookkeeping and accounting, often through Seattle-area companies such as Puget Sound Accounting and Hagen Kurth Perman & Co.

$15,000 for basic maintenance such as hull cleaning and anti-fouling paint, at shipyards such as MARCO and Pacific Fisherman.

$6,000 on gear including buoys, lines and traps.

The boats also spend $1,500 a day on fuel, groceries and bait, some of which is bought here.

"When you see a yacht go under the Ballard Bridge, think about what a nice day he had," said Warren Aakervik, president of fuel supplier Ballard Oil Co. "When you see a crab boat go by, think that he just plunked about $1 million into the community."

Aside from boats, the other major component in crab fishing is processors. They, too, cluster in Seattle, though most also maintain onshore or floating processing stations in Alaska.

Most often, the so-called primary processing of crab -- that is, gutting the crab, cooking it, sometimes dividing it into sections, then freezing the meat in its shell -- is done in Alaska, said John Garner, executive director of the North Pacific Crab Association in Seattle, which represents processors.

He estimated that about 5,000 people are seasonally employed in primary processing. Between 60 percent and 90 percent of them are from outside Alaska, though not necessarily from Seattle, according to government studies.

Primary processors make between $8 and $10 an hour, with production bonuses.

In contrast, most secondary processing -- using a band saw to cut the frozen crab into smaller pieces -- is done in Seattle, Garner said. About 85 percent of crab processing is done onshore, with the remainder done on floating processing plants. All such floating-processor operations are based in Seattle, and hiring for them is done here.

One processor, Snopac Products Inc., operates a floating crab-processing boat in Alaska, employing between 115 and 245 people, depending on the season. About 20 percent of those employees tend to come from Seattle, said owner and president Greg Blakey, as do all the food and supplies.

"Even the salt we use in brine freezing comes from Seattle," Blakey said.

Proposed legislation in Washington, D.C. -- designed to make crab fishing a safer occupation for fishermen and a more stable and predictable industry for processors -- would, in effect, award a guaranteed share of crab, called a quota, to both the fishermen who catch it and the plants that process it.

If the legislation is enacted, Washington State University's Matulich expects that the overall value of the crab industry will double to about $2 billion. The crab fleet would be cut by one-third to one-half because boat owners could sell their harvest rights, and the processors would consolidate to match, "to create an efficient core," he said.

He said he doubts the new system would change the prices paid by consumers. Crabber Blue disagreed, saying he expects the plan would drive those prices up.

Though individual boat owners and processing companies could be adversely affected by the quota system -- an effect that will be most pronounced among new entrants -- the crabbing industry as a whole, including the Puget Sound region, would benefit, Matulich said.