Unless a dispute with US port workers is resolved in favour of Bermuda Container Line Ltd. (BCL), the local freight carrier could succumb to fierce competition on the New York-Bermuda run, according to the company's latest annual report.

The International Longshoremen's Association has blocked BCL's attempt to move its US port operations from Port Elizabeth to the less expensive one at Salem, both in New Jersey. BCL operates the M.V. Oleander freighter from Port Elizabeth to Bermuda.

"BCL has to move if it is to survive,'' according to the company's management.

The cost of handling a container to Bermuda and back is about $280 less expensive in Salem and Fernandina Beach in Florida, about 13 percent of the average freight revenue for a container, states the annual report.

"In addition, the level of service provided, particularly to those delivering cargo into the ports, is vastly superior in Fernandina Beach and Salem than to Port Elizabeth,'' the report states.

The portworkers' association wants to prevent the move as its members are not represented at the Salem port. The association claims BCL is bound under contract to only work from ports where its members are represented, a claim upheld by a Port of New York local industry committee last year.

The committee stated BCL would be in breach of contract and would be subject to damages of $600,000 per voyage if it moved to Salem. In reponse, BCL has asked the National Labor Relations Board to issue an injunction against the association preventing them from enforcing the damages against the company.

BCL has also filed a suit against the association and the New York Shipping Association, an employers' organisation.

BCL president Geoffrey Frith said in an interview yesterday that the freighter company set up at Port Elizabeth in 1978 as it was the only one available at the time. The port is expensive as it handles the larger cargo operations.

BCL has been trying to find a smaller port which could better cater to its needs for the past 13 years, he said. The Salem port terminal became available when it was recently dredged and BCL jumped at the chance to move, a plan which was supposed to have been implemented last year.

BCL had net earnings of about $1.7 million in 1996 compared to a loss of $871,000 the previous year. The delay in the relocation to Salem and the continuing legal dispute led the company to set aside $350,000 in its reserve for relocation costs. That's in addition to the $2.8 million it set aside in 1995.

BCL's Oleander freighter service competes with Somers Isles Shipping Ltd., of which it owns 50 percent, and Bermuda International Shipping Ltd.

BCL is holding its annual general meeting on June 23, 4 p.m. at The Bermuda Chamber of Commerce.

BUSINESS BUC