Bermuda Container Line Ltd., (BCL) which owns and operates the Oleander , said moving its US base to New Jersey from New York will probably soften future freight rate increases.

Included with the move to the Garden State base was a custom designed terminal and container yard located on the Salem River, a tributary of the Delaware River, built by the Port of Salem for BCL.

The terminal will improve cargo handling and flexibility for customers, BCL said in their just released annual report.

US cargo handling and equipment maintenance will be "very cost effective'' and "BCL will have a much better handle on the development of some of the biggest cost elements of its operations which should be reflected in the frequency and height of future freight rate increases,'' the company said.

But the move, previously scheduled for mid-June, has been delayed because the International Longshoreman's Association (ILA) obtained a grievance ruling against BCL from the New York Shipping Association/ILA local grievance board.

The grievance is associated with BCL's move to relocate its US base.

Container Ship Management Ltd. president Geoffrey Frith said yesterday the ILA grievance was "not unexpected'' and hoped the company would be utilising the new terminal within two months. Container Ship Management manges BCL.

BCL has filed a complaint with the US National Labour Relations Board against the ILA grievance proceedings.

"As part of the process of Bermuda gaining more control over this vital sea link, (between the Island and the US) BCL has been looking for an alternative to the vast, expensive and customer-unfriendly Port of New York since 1985,'' BCL said.

The company had looked at 13 different sites and twice was close to closing a deal only to see the efforts frustrated at the last moment.

The Port of Salem, previously unsuitable for the Oleander because of insufficient draft in the entrance river, contacted BCL after dredging made the location accessible.

The change of base, a major move for BCL, was not without impact on the company's results.

In 1995, BCL took a $2.8 million charge in connection with the move to New Jersey which sent results into the red.

For the year ended December 31, the company reported an annual loss of $871,108, or 29 cents per share, compared to gain of $2.3 million, or 76 cents per share, for the previous year.

"This was expected, as noted in the last two letters to shareholders and the 1994 annual report,'' BCL said.

The major portion of the $2.8 million is for BCL's share of unfunded pension liabilities due to the NYSA/ILA pension fund.

The charge also covers the expected costs of relocating equipment, extra temporary staff hired to assist with the move and various other one-off items.

Despite the 1995 loss, BCL's cash flow for the year was described as "very healthy.'' The company said that it paid off the Oleander bank loan three years early, increased cash dividends to $600,000 from $450,000, invested over $200,000 in new fixed assets and added $420,000 to the already healthy unconsolidated balance sheet.

BCL also said that operating profit was $1.9 million, up substantially from the $1 million reported a year earlier. The 1995 result was also the highest since 1989. Per share operating profit was 64 cents compared to 34 cents.

Assets were down marginally at $16.9 million.

Total revenue was $22.5 million compared to $21.1 million.

Expenses were $$20.5 million compared to $20.1 million.

The New Jersey/Bermuda service operated by BCL experienced its best ever volume and gross freight revenue in 1995.

Total eastbound containers totalled 8,263 units, up 206 from the year earlier.

Cargo volume generated gross freight revenue of $19.2 million with an early payment discount resulting in net freight revenue of $18.8 million.

Nearly all expense areas increased due to higher cargo volume.

The company said Bermuda stevedoring costs rose 11.4 percent while equipment costs jumped 19 percent.

The New Jersey/Bermuda service generated operating profit of $1.2 million compared to about one-half million earlier.

The joint venture operation, the Somers Isles service from Florida, showed container volume up two percent and contributed $762,000 to the operating profit.

It was not a record year for Somers Isles but it was the best volume and revenue since 1990, BCL said. Somers Isles freight revenue was $6.8 million.

BCL also highlighted positive results of a programme first noted in the 1994 annual report -- the initiative allowing BCL to provide sea time to young Bermudians wishing pursue a career at sea. During 1995, two people participated.