Gas Prices for NJ Boats Rise, But Boat Builders Still Benefit from Strong Demand
BERKELEY — Henriques Yachts was putting the finishing touches last week to a gleaming $1.4 million, 42-foot sport fishing boat heading for its owner in Brielle.
When completed, the bespoke boat will have a lavish living room in the cabin. It will be built to withstand the roughest seas. But customers who want a version of their own will have to be patient: the current waiting time is two years.
Before the pandemic, “it was a year from now you would have a boat,” said Natalia Henriques-Costa, co-owner of the company.
Henriques Yachts, now in its 45th year, is on a roll. Maybe too high.
The company’s affluent clientele line up to buy its new sport fishing boats, one of the few leisure activities that has not been disrupted by COVID-19. But the second-generation company can’t find supplies and workers fast enough to keep up.
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It’s a sign that the Shore’s boating industry is gearing up for another strong summer, though it faces potential headwinds with soaring fuel prices, rising interest rates and a shaky stock market.
“Our industry has certainly grown and continues to grow,” said Melissa Danko, executive director of the Marine Trades Association of New Jersey, a Brielle-based trade group. But “we are seeing similar issues to other industries with respect to supply chain issues, delays and inventory issues.”
Henriques Yachts has 25 employees who work out of a 41,000 square foot factory nestled in the Bayville section of Berkeley.
Workers work at a breakneck pace, building six to eight boats a year that range from 30 to 50 feet, cost between $550,000 and over $2 million, and can have all the comforts of home: air conditioning, televisions, refrigerators , even barbecues.
The company was founded by Henriques-Costa’s father, Joaquin “Jack” Henriques, who learned the boatbuilding trade growing up in Portugal before immigrating to New Jersey.
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Forty-five years of yacht building
He founded the yacht builder in 1977 at the age of 44. He then purchased Lanoka Harbor Marina. And he kept a hand in the business until his death in 2019 at the age of 85.
Natalia and her sister, Maria Henriques-DeMers, grew up in the family business and run it today with Natalia’s husband, Manuel Costa Jr. In many ways, the business is a bellwether for the economy in the sense wide.
When the pandemic hit in the spring of 2020, Henriques Yachts closed for three weeks and its owners prepared for the difficult times ahead. Instead, customers flooded the company with so many orders that it couldn’t keep up.
The yacht builder has raised wages, offering a starting salary of $25 an hour to go along with health and pension benefits, but has struggled to find qualified help. Last week it advertised for fiberglass and woodworkers.
Meanwhile, the global supply chain has been disrupted, causing delays. The lead time to get custom windshields from its supplier in New York, for example, has gone from six weeks before the pandemic to six months, said Michael Costa, Natalia’s son and the company’s purchasing director. .
The result: Boats ordered now won’t be ready until 2024.
Was the company worried about losing customers?
“Of course,” Henriques-Costa said. “Do you want to hear, ‘My boat is going to take two years to build’?”
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Work on a backlog
U.S. boating industry sales have hit record highs during the pandemic, the National Marine Manufacturers Association trade group reported, noting that consumers were looking forward to spending time outdoors with friends and family, away from the COVID life stress.
Recreational boaters received financial assistance. The stock market and house prices have gone up. And interest rates were low; New Jersey boat loan applications rose 166% in 2020, the third-biggest jump nationally, according to LendingTree, an online lending marketplace.
However, once the loans were approved, many boaters ran into a shortage of inventory. As summer approaches, Jersey Shore dealerships and marinas said they were working through a backlog.
Comstock Yacht Sales and Marina in Point Pleasant Beach is preparing and delivering boats that were sold a year ago, said Don Ditzel, vice president, adding that manufacturers continue to wait for parts to arrive and to cope. to a labor shortage.
Although prices rose slightly, Ditzel said the dealership did not charge more than the manufacturers’ suggested retail prices, primarily because the boats are considered discretionary. If they become too expensive, customers may leave.
As summer approaches, there are few signs of boaters pulling back, said Gloria Van Biert, manager of Sandy Hook Bay Marina, a 120-berth marina in Highlands.
“The first year of the pandemic, a lot of people got into boating because they had nowhere to go,” Van Biert said. “Our waiting list tripled right after the pandemic because everyone is buying boats. And it still seems to be that way.”
How long will the good times last?
Not that the boating industry is without worries. As the Federal Reserve attempts to slow the economy to bring inflation under control, interest rates rise and the stock market crashes, threatening to slow consumer spending.
And gasoline prices have reached record highs. According to AAA, the average price for unleaded in New Jersey on Monday was $4.98 per gallon, up 63% from the same time a year ago. And the average price of diesel, used by commercial party boats, was $6.12 a gallon, 89% higher than a year ago.
Analysts say there is little relief on the horizon.
Scott Policastro, captain of the Jenna P Sportfishing Charter in Highlands, said his boat had about 260 gallons of unleaded but only got 1.3 miles per gallon, which made gasoline expensive.
He added an extra 15%, which equals an extra $150 or $200, to each trip. And the summer begins slowly.
“It’s a little worrying,” Policastro said.
At Henriques Yachts, workers last week continued to make progress on the 42ft boat, the glossy hull painted black and white, divided by a sharp blue stripe. And other shells were emerging behind.
The company is still plagued by slow deliveries of copper wire. And if he could find more workers, he could cut the wait time from two years to 18 months, said Natalia Henriques-Costa.
But with economic clouds beginning to form, Henriques-Costa seemed happy that the business was continuing to move forward at a slow and steady pace.
“We’re not complaining,” she said. “We’re happy where we are right now. We wish he had a few more employees. But the orders are coming in, which is good.”
Michael L. Diamond is a business journalist who has written about New Jersey’s economy and the health care industry for more than 20 years. He can be contacted at [email protected]