container ship lines should merge in order to survive, the president of the company which manages one of them suggested yesterday.

Mr. Bill Brewer warned that if the two lines remain in competition with each other, freight rates will shoot up to levels that will be "unacceptable'' to importers.

He said price increases were necessary to keep the two lines financially viable.

"There is simply not enough business available in the foreseeable future to support two container ships and the back-up management plus equipment to run them,'' said Mr. Brewer, president of Containership Management Limited.

"It is not economically sound to operate two competing Bermuda shipping lines when one consolidated company could provide a first class service for the community.'' Mr. Brewer made the comments during a lunchtime speech to Hamilton Lions. His company manages BCL which owns the Oleander . And its competition Bermuda International Shipping Limited owns the Bermuda Islander . Both ships provide service from the north-east coast of America.

After 11 successful years, Mr. Brewer said Bermuda Container Lines was now suffering a levelling off in business.

"Operating expenses have continued to escalate and a devastating rate war between three and more recently two local lines has depressed the rates in some cases to the 1983 levels,'' he said.

"Rationalisation of various shipping groups throughout the world is taking place. Ships and equipment are being pooled in order for the partners to survive the world economic recession.'' Apart from the recession, Mr. Brewer said local shipping companies were also concerned about relations between labour and management on the docks.

He charged labour-management relations were in far better shape a decade ago than they are today.

"In my opinion the transfer to containers and consequent change in the workforce would not have been achieved with the same beneficial results to all if today's labour-management climate had existed,'' he said.

Mr. Brewer called on the Corporation of Hamilton to buy Stevedoring Services' equipment or buy its own to eliminate the company's monopoly on offloading containers.

"(Offloading containers) should be open to others so there is more competition,'' he said.

Mr. Brewer recalled how shipping services had changed completely with the onset of containerisation in the late 1960s.

And he commended the Corporation of Hamilton for funding the building of the container terminal.

"Without this investment, Bermuda could have been left behind and not able to take advantage of the container age,'' he said. "The worldwide move to containers dictated that Bermuda must move with the times.'' Mr. Brewer pointed out that Government had been "sceptical'' about containers being suitable for Bermuda, especially considering its narrow roads.

"However, we convinced them it was better to have one container to move instead of three to four trucks which would be required to move the same amount of cargo,'' he said.

Mr. Brewer's first job was as a passenger clerk with John S. Darrell when he returned from university in 1951. He told Lions how he initiated discussions with a small group of Bermudians on having a Bermudian company own and operate a shipping line to serve the important New York to Bermuda trade.

Those discussions, he said, culminated in the incorporation of Bermuda Container Lines on August 17, 1979.

Mr. Brewer then formed the company Container Ship Management and was given a five-year contract to manage the new line which included the Oleander .