Riding out the storm

Paul: And welcome once again to Island Thrive. My name is Paul Holmes, and I am co-hosting today’s episode with Dave Monahan, who is the President of Smart Dolphins IT Solutions. How are you, Dave?

 

Dave: Very good thank you Paul.

 

Paul: Great, and our guest today, actually, we’re very excited. You probably know the Coho ferry, if you’ve been in Victoria for any length of time, and it’s been in operation for 60 years, taking passengers daily between Victoria and Port Angeles, Washington, and the company behind that is black ball ferry line. Joining today is Ryan Burles, the president, COO and co-owner with the company for over 25 years. Ryan, welcome to the show.

 

Ryan: Thank you for having me.

 

Paul: Yeah, and obviously a bit of a crazy time right now, but how are you… How are you doing personally?

 

Ryan: Well, a lot slower than we’d like, but personally it’s being a quiet time and a little hard to get everything around my head, but generally good. I think we’re having to be resilient and keep taking readings as we say, but we’re hoping and that we’ll have a future and it isn’t a guarantee, so it is a pretty intense time for us.

 

Paul: Yeah, and of course, on background here in the US, Canadian border has been closed several months now, and so the Coho ferry is not an operation. I guess there is a scheduled review of the border closing happening on August 21st, and I’m not sure how much optimism there is around the border re-opening. I’m not sure if you want to speak to that, if you have thoughts you want to share (this episode may come out after that too) so…

 

Ryan: For our company, we really expected maybe in the spring to open, we have kind of gone month-to-month, because again, you never know, but the province has said that they will keep the 14-day quarantine unless one of the three objectives have been met which is: a vaccine, herd immunity or a drug that reduces the death rate, so that’s not happening tomorrow, and when it happens and how well it goes, the vaccine goes out, for instance, is unknown. So we’re kind of anticipating what Tourism BC has stated that it’s about a 60% chance the border will open sometime in the spring…

 

Paul: We’re talking spring 2021.

 

Ryan: That’s correct.

 

Paul: Wow, okay. Well, so yeah, any business relies entirely on tourism and its Canadians going to the US and Americans coming to Canada, obviously is the bulk of your business, right. So everything is on hold, I guess, until the opening.

 

Ryan: Yeah, we do have about a little over 10% in commercial traffic, which we could operate, but had we had operated we would be dead. So we could operate for essential travel for commercial, but we won’t. What we’re as concerned about is, we are right now at a skeleton crew, and we have had some government help with the paycheck protection plan in the States where they paid for people for two months, and we could maintain the ship really well and all that now we’re right at skeleton staff, and we can last a long time with skeleton staff, but we’re concerned when we come out whether traffic is at 50%, 70%, we don’t know. We have a kiddie and we are sound that way, but going forward, we are working on lobbying pretty hard to get either a grant or loan, and right now, both the Congress and the Senate and President Trump, are arguing diligently over their next package, some of the stuff that supposedly is in that package is about loans and stuff, so were hopeful that they’ll have some program for us. Right now have one called the MainStreet loan, which is a kind of a limited loan, it’s a five-year payback on a loan, which isn’t the greatest, that would give us some good sound future, but five years isn’t the best. So we’re hoping some of those things will be maybe 10 years or 20 years of loans, so because we do think it’s a real unknown what the future holds in the spring, or whether we’re even going in any good sense the next summer.

 

Paul: And your company is entirely a US corporation, and obviously, you have a lot of staff in Canada and the US, but are they all employed by the US company then?

 

Ryan: They are.

 

Paul: Yeah, so what happens to the Canadian staff right now?

 

Ryan: We have 7 full-time and they are laid off and we have 17 part-time and they’re laid off too. We got been doing it month-to-month, basically, again. That’s a concern. We obviously don’t want lose our staff, like our company has been bit of a family. I would say we really have a close ties with our people, so we want to keep everybody and certainly feel that they’ll stick with us, but again, the longer, the more you are a little worried about what their future is too, because they have to provide too so.

 

Dave: So you’re not able to get any kind of Canadian support I would imagine being a US company, even though you have Canadian employees.

 

Ryan: No, we haven’t we don’t feel we can and we don’t feel being American flagged being American-owned. There’s no right of opportunity. We did bump up in those months in May and June when we had that payment protection plan. We did give a $1000 a month to each one of our full-time employees on this side as a bump you know, and we’ve kept pay their medical, and on both sides, we’ve kept their medical and pay the medical for our employees. So we’re trying to keep that in place.

 

Dave: I can speak personally, because I worked at blackball for long time, nine years while was going to school, so I can definitely speak to a great company that obviously just from you just said, cares a lot about your people yeah, that’s great.

 

Paul: This is the problem, I think, in so many industries, but the tourism industry especially, is you’ve got skilled people who know the company, who know the industry, they know the ships and if you lose those people during this period, which it’s probably going to happen with some people right, or they’re just laid off. You have no choice, you just run out of money, you can’t keep them one. You’re not necessarily going to get those people back when this is over, right, you’re going to have to train new people, you’re going to have to go through all that, and so I guess that’s I think probably the biggest tragedy, because these are people you’ve worked with, in some cases, I would imagine for decades and longer right?

 

Ryan: Most a lifetime. We are fortunate that the federal government in the States until end of July was the unemployment is through the state, so Washington State, but they were putting an extra $600 per week to their unemployment, so you basically, if you’re unemployed, you… anybody making $64,000, that’s what your payment was, so even if you made $50,000 your unemployment was $64,000 so for the month of May and June, there was no danger of anybody to go anywhere because some of them are paid more than that, but it’s still a very robust unemployment, so there is no need to go anywhere. Right now they haven’t agreed to push that forward, and there’s a big battle between the Senate and the Congress right now in regard to whether they’ll keep that $600 or cut it completely off or cut it to $200. So right now, as we go out, if we go on another six months and they don’t get any help from the Federal government unemployment than maybe some of our people will have to go, we feel though, because of how well we pay and what we treat them that we feel just about everybody would come back. What we call the Inland Boltman’s Union, which is the sailors, they’re able to go to that to union and go on the board and they could go deep sea or maybe work for Washington State. So Washington State does have some positions available, so that might happen as we go forward, but chances are they will all come back.

 

Dave: So obviously a very challenging time, I know that a lot of business owners have found innovative ways to navigate this, anything come to mind in terms of you’ve been able to do again,

 

Ryan: Well, I don’t know if it’s very innovative, but we got our blackball shop up on the Internet, so now if you want to buy a t-shirt or a mug that we’ve started it about a week ago, so that was one thing we got up, we used Shopify and we’ve got some really pretty good sales, so we had about… Oh, I don’t know, $40,000 worth of merchandise. So we’ve got that and we’re going to continue that.

 

Paul: I believe Dave will be buying a t-shirt for every staff member.

 

Dave: There we go.

 

Ryan: Please do.

 

Dave: What’s the URL?

 

Paul: The name website?

 

Dave: cohoferry.com.

 

Paul: Ryan you have a really interesting story, of course, you started when you were a student with the company, just worked your way up in the company, there’s got to be a really cool story there, can you give us the highlights or is it not a cool story?

 

Ryan: Yeah, I think it is cool. I think for Black Ball, it isn’t really. I think the last five, six Captains started out as a porter on the ship, as a student, maybe not two of them but five did but even the others started as sailors and moved through. So for black bull, we’ve come really from the beginning. Let’s say with me, I was at UVic and worked in the summer. And then my boss, Mr. Fermenta asked if I’d like to be his assistant because he was about 69 and then kind of move forward. We don’t have a very hierarchical system, so I manage this side and I might have a title, but really we have a very flat group, so the captains really have the same story, they came from, porters and moved their way up. So it’s a neat story, but it’s one I think that makes our company so special because nobody doesn’t really know what everybody’s done from the bottom up. And we’re all just trying to make it work, what I mean. So it’s pretty neat that way.

 

Paul: But I guess the marine industry is fairly hierarchically structured that way too right where it’s not that unusual for somebody who started a lower sort of spot and just kind of work their way up the ranks of like in the military or navy so that’s really neat and it’s neat, that same kind of moving up and growing and maturing, and your role you’re able to translate that over to the business side as well, so that’s a pretty neat story. Dave worked there for nine years and didn’t he just left.

 

Dave: I kept hitting my head on the glass ceiling there. In fact, I think they booted me out they said “you’ve been here long enough, get out of here.”

 

Paul: Go start an IT company.

 

Dave: That’s actually what I did. I started Smart Dolphins after that.

 

Ryan: Truly one of the great parts of this job is watching all the young people come through and go on to build companies, be doctors, lawyers, really something else. Really, it’s the greatest group. It’s one of the best parts of the job. Dave was a little bit of a project, but…

 

Dave: Save that for another podcast.

 

Paul: Yeah, you can just tell me after we finish recording all the things I need to know.

 

Dave: And the family thing is really true, I am still in touch with guys and gals, I worked with then, and I bumped into somebody. We actually last year talked about maybe doing a reunion, so I’m not sure that will happen this year now.

 

Ryan: No, it’s changed everything.

 

Dave: Yeah, I know you also have a good sense of, or at least insight into the tourism industry, so I’m not sure, it’s obviously a really hard time. How bad is it I guess? Is there some perspective on what the next year looks like? Next few months? Crystal ball?

 

Ryan: I think that… Well, locally, I think it was difficult to get around how to handle this pandemic and what to do and how to do it, and then it was evident that really Bonny Henry in BC had done such a fine job of controlling it. And then you see the spikes in other parts of the world and in America and there is no way out of this, so you can only do what you can do. So local tourism and keeping the virus down. So I think it’s a little concerning that hopefully going forward as destination BC and others have been kind of talked about getting a package out to some of the industry, I think a $680 million package. But I think loans much like America is doing, I think that’s probably needed. I don’t know if this pushes into next summer and numbers are poor than I think much like Paul mentioned about our company, I think lots of companies will have not only a people thing, but structurally, maybe not last. So I think that’s still hard to know where that will come out. I think the hotels, the whale watchers, I don’t think their numbers have been that good, you know what I mean? From what I understood, so I know with the different programs, rent relief and the CERB and all that, but it’s still, I think marginal if they’re making money, so I think it is something that be very concerned about going forward. In America too. It’s very much a battle too, so they do seem to have a few more programs, like the main street loan where you can borrow and they have put that out and seemed to have listened that, “hey, they need to do more.” So time will tell, but that should help for a lot of smaller businesses, not maybe the big guys, which is I think so important for the tourism communities on both sides.

 

Paul: If you were advising the Canadian or provincial government here in British Columbia sort of seeing what it is they are doing and then seeing what they’re doing in the US, is there something in particular that you would… Like advice you would give?

 

Ryan: Well, I think one of the pieces that they have talked about, which I agree with, is some way of a loan, some on loan or grant with obviously, the interest rates aren’t that big of an issue, but maybe a long payback or relief in some way. I think that would be good.

 

Paul: There is a loan program, Dave?

 

Dave: I think it’s $40,000, it’s not much, it will bump you along I guess.

 

Paul: Yeah, it’s hard to put your entire business on hold for 12 months on $40,000, I suppose.

 

Dave: Yes. What about, I think about there’s so much infrastructure in some of the industry hotels, there’s a building there, and obviously its upkeep and so I guess I’m kind of curious how it all plays out. You have this investment in a hotel, but you’re not making money for maybe years here.

 

Ryan: I think that’s similar to our ship, but you want to keep that ship maintained and if you can’t, then what occurs and if somebody walk in very easily and all that, and then the know-how and the management skills and all that starts to follow. So I hope that the federal government, again, WestJet, Air Canada, and what they’ve asked for and really haven’t been given any sort of, I’d say sense that they’re going get any help. So it will be interesting to see as we go forward.

 

Dave: There is so much value to be lost there, scary.

 

Ryan: And the confidence of travel in general, as we talked about, off air there about the cruise ships and just safe travel in general, where that will go, I don’t think we all really know is a vaccine going to change the whole behavior and make people feel comfortable in all those settings again, it’s hard to say. I’m a real believer that we all love to travel, we all need to get out and see something new, and that as great as a place as Victoria is for instance it doesn’t mean that any one of us doesn’t want to getaway. I can’t see that changing, but maybe some of the patterns through safety will. Will driving be more common as it was? I don’t know.

 

Dave: Yeah, absolutely, I think it would be somewhat of a pent-up demand, and when people feel safe, they’re like “I’m finally getting out here.” I think we’ve seen a little bit more of that in the city. People are going up Island a lot more.

 

Paul: Traveling but closer to home. Right, yeah. And you hope that for some businesses like hotels and stuff that will help. But obviously, there’s some businesses where, especially the cross-border focused ones, where that’s just not going to be open at all.

 

Dave: And again, sort of looking at the industry, any silver lining, any innovation that you see, and some of the players in the industry is there anything good to speak of here?

 

Ryan: I don’t really think so. I don’t know, I think as you know cruise ships are going to spend a lot of time trying to create more cleanliness, the airlines are trying too, whether it be filter systems or… But I don’t know if that’s a silver lining or not, frankly. I think this is a time when it does reflect on just how our society in general has been kind of wallop and that maybe it’s not always (for me at least) I feel that, “hey, you can never assume that everything’s going to be okay.” And that now you have to realize. So I think going forward, the steps that need to be done, hopefully everybody can be cognizant and create a better confidence. I think whether it’s the American-Canadian and feeling comfortable to go back to visiting each other, and for us, that’s a bit of a concern because some of the angst there. And so you hope that we still are good neighbors and still enjoy. I’ve been part of Black Ball through 911 and through the passport issue and the downturn in cross-border travel, and so you have to be concerned about that, but at the same time, are both countries and the history of, hopefully we can walk it through and not get caught up in what this pandemic has kind of made people feel very protective of their home and their areas.

 

Paul: Well, I know for me, the greatest memories in my lifetime was when I was a younger man, going with a bunch of friends, and we rented an RV, and we got on the Coho ferry and we did an epic road trip through America, we did Las Vegas, Reno, Disneyland. A bunch of crazy places and that was it. The Coho ferry was part of that. Part of perhaps one of my greatest memories, don’t tell my wife, because I should say that my wedding was probably my greatest memory (although that was a bit of a blur.) And I bet you there’s a lot of folks and Victoria, and for that matter, in Port Angeles and Seattle who have that same fond memory. So we certainly hope things work out well for the Coho and for Black Ball in the long run because it’s great company, you guys have been doing amazing an amazing service for a long time, and obviously the things you do for the community, getting students working there, and people like Dave who get inspired and started incredible businesses as well, so…Before we kind of wrap up though, I was curious, Ryan, about your experience going online. Because one of my favorite beef jerky companies is a Canadian company, and they’re called McSweeney’s and I love their beef jerky, I was having a heck of a time getting a hold of it. And then I noticed that they put a shop online during the pandemic, so suddenly I’m buying a box of meat that’s getting delivered to my door and it’s a Canadian company, so I can support a Canadian company. I don’t have to buy it through Amazon and all that sort of stuff. And I know Shopify is a Canadian company as well. So I feel a lot better about buying that than and it’s not to say, obviously, Amazon is not a bad thing, and there’s lots of great American companies, including yours, but just to be able to feel like I’m supporting smaller companies, not just one big behemoth right. So I know you guys set up the shop there, I wonder if you could talk a little bit about the experience when you were setting up your online merchandise shop? Was it easy? Were you involved in it?

 

Ryan: Well, because I’m the top dog, I didn’t. I wasn’t really. Ryan Anderson, who’s over in PA, did it, but he told me that Shopify was a breeze, and it was really quite easy and they did it all, they probably would have had some more professional photography or set up for some of the items, but generally, he said it was really quite simple. And we’ve been quite busy, so it’s good. I think like you that locally, either our Facebook people and what we’ve put out to the reservation people, there’s a lot of support for us, a lot of people started to buy right away and when were really, really busy, so we’ll see how that lasts, but…

 

Paul: Yeah, so you ship those directly from your headquarters, then you get the orders in, you ship directly, and Shopify has just built the e-commerce system. Yeah, actually that makes it really slick, I’ve used a few of them, including my favorite meat company, which I mentioned earlier, but you can pay with PayPal or just one click payment and all that sort of stuff. So yeah, that’s really a neat story. So I’m looking at https://shop.blackball.com/, so if missed the Coho, you didn’t get to take it this summer, you can get yourself keychain and a patch and a hat and a hoodie…

 

Ryan: Or a Black Ball ball too.

 

Paul: The executive decision-maker. I’m going to send that one to Dave afterwards. Yeah, because everybody needs one of those on their desk.

 

Ryan: You can throw them across the room so no problem.

 

Dave: Socially distance.

 

Paul: We’ve been trying so hard in all of these podcasts to find the silver lining and put a happy face on. I don’t think we’re going to do that today. It’s just the stark reality that not every story is a happy story, but hopefully we’ll see happier days ahead…

 

Ryan: Yeah, yeah, I think I mean, the vaccine will come, whether it’s a home run or a single… who knows. But our link, anybody who’s been on the Coho comes into our harbor, if you’ve… that’s an incredible experience, and if you’re crossing and seeing the mountains of the Olympic mountains, it’s the same thing. So our Vancouver Island is, we all know it, where we live is paradise, and it’s going to be there for many years to come in, our link is the most direct link to the south. So no, we’re here to stay and so is tourism. I think there’ll be a few bumps and whether we come out of it in the year, it takes three or four is I don’t think anybody’s guess at this stage, but a link or you couldn’t get a better link, we’re so very. And really our partners, transportation BC and Port of Port Angeles and both cities are so supportive, so now we’re very fortunate, so the silver lining is really the structure of the company, and this link they are etched here and they will continue to forever. I can’t see that changing. Big word forever though.

 

Paul: Well, I guess we’ll be traveling a little closer to home this summer for those that are braving travel, and I look forward to spring and summer next year going and visiting America, and maybe I’ll do one of those big road, RV road trips again and start it off on the Coho. I’m a little older and probably won’t go with six of my male buddies…

 

Ryan: But you’ll remember more.

 

Ryan: Well, thank you for having me. All the best.

 

Paul: Yeah, thank you so much. We appreciate your time and for those of you joined us today, just a reminder that you can subscribe to our podcast on Google podcasts and on the Apple Podcast app as well. And we’ve been joined today by Ryan Burles, the president, chief operating officer and co-owner of black ball ferry line and remember to visit them at cohoferry.com or get your merchandise shop.blackball.com is up and running with your executive decision maker ball, just waiting for you to order. Thanks again, Ryan and Dave, have a fantastic weekend. We’ll see you all next week.

 

Ryan: Thank you.

 

Dave: Thank you.