Lifeline for Catalina comes in shipper’s daily deliveries

Most small businesses can’t say that an entire community depends on their services. ¶ Then there’s Catalina Freight Line. ¶ Each day, the Wilmington company brings tons of cargo used by Santa Catalina’s 3,500 permanent residents and the 1 million or so visitors it hosts every year. ¶ “It’s overnight delivery, but it’s overnight delivery at 3 to 12 knots,” quipped Chuck Davis, general manager of Catalina Freight, which for 44 years has enjoyed an exclusive contract for waterborne cargo to the island, bringing in about $3.5 million in annual revenue. ¶ But on the horizon, storm clouds are gathering. ¶ In 2014, Catalina Freight Line Inc.’s cargo delivery monopoly to the island is scheduled to end. The company has begun to get ready, hiring Davis to explore diversification options. ¶ Even a monopoly has its challenges. ¶ The company’s fuel costs, like everyone else’s, have soared, but it can’t simply raise prices. For most of what Catalina Freight sells, price increases require approval from the California Public Utilities Commission. And few other companies have to worry about the size of ocean swells and surges before making a delivery.

Catalina Freight is the parent of Pebbly Beach Building Supply, which serves as a mini Home Depot-style store for the island; Avalon Marine Dock, the island’s gas station for boats; and Catalina Beverage Co., which services the island’s hotels and restaurants. It employs 36 people, including tugboat captains, deckhands, welders and office staff.

Over the years, the company has shipped just about everything. Its noisiest passengers probably were bison -- sent to the Great Plains a few years ago, to the Cheyenne and Lakota Sioux tribes, to shrink the island’s herd.

The heaviest? Probably the county fire equipment returned to the mainland after the 2007 wildfires. The company also carried barriers used to block mudslides and poles to replace those destroyed by the wildfires.

On a typical morning this week, the company’s 15,000-square-foot warehouse at the Port of Los Angeles began to take on its usual appearance, resembling a staging area for a supermarket chain, a hardware store, a construction supply company -- or a huge party. There were cases of Jack Daniels and Tequila Cazadores, 400 tons of gravel and sand, rolls of carpeting, a water heater, plastic rain gutters, containers of garage floor coating, refrigerated shrimp, steak and lobster, with much more to come.

By 5 p.m. each day, as much as 1,000 tons of freight will be outbound for Catalina on two company barges towed by company tugboats and a renovated Vietnam-era Navy landing craft. The latter is ideal for the many remote clubs and retreats on the island that have to be serviced from the beach because there are no roads or piers.

By 9 p.m., the cargo is unloaded for use at the island’s hotels, camps, restaurants and stores the following day.

Catalina Freight Line traces its roots to William Wrigley Jr.’s dream of transforming the island he bought for $3 million in 1919 into a mecca for tourism.

In the 1950s, a fight over labor costs threatened Catalina Island’s status as a tourist destination and as a place where residents could live year-round.

At the height of the dispute between the dockworkers union and a company that then supplied the island, boat freight was blocked by union pickets for six weeks in 1958, and the island’s then 600 permanent residents survived on what could be supplied by plane. Locals dubbed it “The Little Berlin Airlift.”

By the time the National Labor Relations Board ruled against the union in 1959, the Wrigley family had apparently had enough.

Its Catalina Island Co. decided to set up a new business to handle the freight. Catalina Freight was born, given exclusive rights to supply the island through 2014, with one of the family’s trusted accountants, Jack Fennie, selected to run it.

Today, Fennie’s son, Jack Jr., still serves as chairman of the company. Day-to-day operations are handled by Chief Executive Richard Coffey and Davis, who said he was brought in five years ago to help the company prepare for the time when it might face competition for island business.

For Davis, 64, running a small business was a huge change. He had been with Consolidated Freightways as group manager for Southern California, in charge of 900 employees at one of the company’s biggest facilities.

“I get to do everything now. I don’t even have a secretary,” Davis said from the small trailer that serves as his office. His window looks out over the port’s East Basin, and he likes to watch a heron, which makes daily visits to the company pier, scan the water for fish.

Looking ahead to 2014, the company has begun to consider new ventures, perhaps purchasing and renovating some of the island’s older cottages that could then be rented to tourists, Davis said.

It has also considered buying more vessels to expand to customers outside of Catalina. It briefly considered opening an organic foods market on the island, but after calculating all of the possible costs, “it just didn’t pencil out,” Davis said.

But lately, management has been thinking that the company just might be able to get another exclusive contract.

“Anyone trying to take this business away from us would have to get a lease from the Port of Los Angeles, which is almost impossible these days,” Davis said. “They would have to develop from scratch everything we already have.”

In the meantime, there is always a lot to keep up with, such as making sure that drivers meet Department of Transportation regulations and getting the latest in security training from federal officials every calendar quarter.

“It’s really a unique business,” Davis said. “Every day there’s some new challenge we haven’t thought of. I love it.”

ron.white@latimes.com

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Catalina Freight Line

Business: Exclusive shipping

line to Santa Catalina

Chairman: Jack Fennie Jr.

Headquarters: Wilmington

Employees: 36

Annual revenue: $3.5 million