_________________________________________________________________
_________________________________________________________________



               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                            FORM 10-Q
                                
(Mark One)

(x)  QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934
     For the quarterly period ended September 19, 1997
                               OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934
     For  the  transition  period  from  _________________   to
     _________________

                                
                                
                  Commission File Number 1-8544
                                
                                
                                
                           APL LIMITED
     (Exact name of registrant as specified in its charter)

          Delaware                                  94-2911022
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)             Identification No.)


                          1111 Broadway
                   Oakland, California  94607
            (Address of principal executive offices)
                                
         Registrant's telephone number:  (510) 272-8000

      Indicate  by  check mark whether the registrant  (1)  has
filed  all reports required to be filed by Section 13 or  15(d)
of  the Securities Exchange Act of 1934 during the preceding 12
months and (2) has been subject to such filing requirements for
the past 90 days.  Yes (X)  No ( ).

      Indicate the number of shares outstanding of each of  the
issuer's  classes of common stock, as of the latest practicable
date.



          Class                Outstanding at October 17, 1997
____________________________   _______________________________

Common Stock, $.01 par value                   24,888,866


_________________________________________________________________
_________________________________________________________________
<PAGE>
                           APL LIMITED

                              INDEX



       PART I.   FINANCIAL INFORMATION                    Page
                 _____________________

Item 1. Consolidated Financial Statements

       Statement of Income                                   3
       Balance Sheet                                         4
       Statement of Cash Flows                               5
       Notes to Consolidated Financial Statements         6-11

Item 2. Management's Discussion and Analysis
        of Financial Condition and Results of Operations 12-22


       Part II.  OTHER INFORMATION
                 _________________

Item  1. Legal Proceedings                                  23

Item  4. Submission of Matters to a Vote of
          Security Holders                                  24

Item 6. Exhibits and Reports on Form  8-K                   24

       SIGNATURES                                           25


<PAGE>
APL Limited and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (Unaudited)
______________________________________________________________________
(In thousands, except          Quarter Ended            38 Weeks Ended
per share amounts) September 19 September 20 September 19 September 20
                           1997      1996            1997         1996
______________________________________________________________________
Revenues               $653,232  $646,123      $1,958,753   $2,013,515
______________________________________________________________________
Expenses                629,352   597,305       1,925,007    1,904,573
______________________________________________________________________
Operating Income         23,880    48,818          33,746      108,942

Interest Income           6,361     6,468          18,724       19,466
Interest Expense        (13,523)  (14,483)        (42,431)     (47,043)
______________________________________________________________________
Income Before Taxes      16,718    40,803          10,039       81,365
Federal, State and
  Foreign Tax Expense     5,270    12,659           1,012       28,478
______________________________________________________________________
Net Income             $ 11,448  $ 28,144        $  9,027     $ 52,887
______________________________________________________________________
______________________________________________________________________

Earnings Per Common Share
______________________________________________________________________
  Primary                $0.44      $1.07          $0.35       $2.01
  Fully Diluted          $0.44      $1.07          $0.35       $2.01
______________________________________________________________________

Dividends Per
 Common Share            $0.10      $0.10          $0.30       $0.30
______________________________________________________________________
______________________________________________________________________

See notes to consolidated financial statements.
<PAGE>

APL Limited and Subsidiaries

CONSOLIDATED BALANCE SHEET (Unaudited)
_________________________________________________________________
(In thousands, except share amounts)   September 19 December 27
                                               1997        1996
_________________________________________________________________
ASSETS
Current Assets
Cash and Cash Equivalents                 $ 299,539    $102,370
Short-Term Investments                       57,472     180,628
Trade and Other Receivables, Net            229,318     242,460
Fuel and Operating Supplies                  31,614      29,220
Prepaid Expenses and Other Current Assets    70,296      61,804
_________________________________________________________________
Total Current Assets                        688,239     616,482
_________________________________________________________________
Property and Equipment
Ships                                       905,759     903,227
Containers, Chassis and Rail Cars           760,874     764,294
Leasehold Improvements and Other            240,832     252,466
Construction in Progress                      5,075      29,078
_________________________________________________________________
                                          1,912,540   1,949,065
Accumulated Depreciation and Amortization  (841,997)   (825,846)
_________________________________________________________________
Property and Equipment, Net               1,070,543   1,123,219
_________________________________________________________________
INVESTMENTS AND OTHER ASSETS                142,781     140,477
_________________________________________________________________

Total Assets                              $1,901,563   $1,880,178
_________________________________________________________________
_________________________________________________________________


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current Portion of Long-Term Debt
  and Capital Leases                      $     359    $  9,866
Accounts Payable and Accrued Liabilities    420,189     380,690
_________________________________________________________________
Total Current Liabilities                   420,548     390,556
_________________________________________________________________
Deferred Income Taxes                       174,852     173,867
_________________________________________________________________
Other Liabilities                           116,144     116,569
_________________________________________________________________
Long-Term Debt                              680,669     695,546
Capital Lease Obligations                       532         801
_________________________________________________________________
Total Long-Term Debt and
 Capital Lease Obligations                  681,201     696,347
_________________________________________________________________
Commitments and Contingencies
_________________________________________________________________
Stockholders' Equity
Common Stock $.01 Par Value, Stated at $1.00
  Authorized-60,000,000 Shares
  Shares Issued and Outstanding-
  24,879,000 in 1997 and 24,564,000 in 1996  24,879      24,564
Additional Paid-In Capital                    4,682         632
Retained Earnings                           479,257     477,643
_________________________________________________________________
Total Stockholders' Equity                  508,818     502,839
_________________________________________________________________

Total Liabilities and
 Stockholders' Equity                    $1,901,563  $1,880,178
_________________________________________________________________
_________________________________________________________________

See notes to consolidated financial statements.
<PAGE>

APL Limited and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
_________________________________________________________________
(In thousands)                                    38 Weeks Ended
                                       September 19 September 20
                                               1997         1996
_________________________________________________________________
Cash Flows from Operating Activities
Net Income                                 $  9,027      $52,887
Adjustments to Reconcile Net Income to Net Cash
 Provided by (Used in)Operating Activities:
  Depreciation and Amortization              77,813       83,466
  Deferred Income Taxes                         985       12,094
  Change in Receivables                      13,142        3,006
  Change in Fuel and Operating Supplies      (2,394)       9,884
  Change in Prepaid Expenses and Other
   Current Assets                            (8,492)       5,642
  Gain on Sale of Property and Equipment     (6,286)      (2,364)
  Gain on Sale of Leased Barges             (16,152)
  Gain on Sale of Distribution Services                   (6,900)
  Change in Accounts Payable and Accrued
   Liabilities                               39,499        2,234
  Gain on Curtailment of Pension and
   Postretirement Benefits                               (12,934)
  Other                                     (11,672)     (31,561)
_________________________________________________________________
   Net Cash Provided by Operating Activities 95,470      115,454
_________________________________________________________________
Cash Flows from Investing Activities
Capital Expenditures                       (107,832)    (102,776)
Proceeds from Sales of Property and
 Equipment                                   89,193      161,728
Proceeds from Sale of Leased Barges          41,463
Proceeds from Sale of Distribution Services                2,000
Purchase of Short-Term Investments         (113,934)    (407,725)
Proceeds from Sales of Short-Term
 Investments                                237,090      288,943
Transfer from Capital Construction Fund       2,688
Other                                       (18,995)      (1,546)
_________________________________________________________________
   Net Cash Provided by (Used in)
     Investing Activities                   129,673      (59,376)
_________________________________________________________________
Cash Flows from Financing Activities
Repurchase of Common Stock                               (14,755)
Issuance of Debt                                          62,215
Repayments of Debt                          (24,563)     (31,342)
Repayments of Capital Lease Obligations        (246)     (11,604)
Dividends Paid                               (7,410)      (7,713)
Debt Issue Costs                                          (1,624)
Other                                         4,362        2,265
_________________________________________________________________
   Net Cash Used in Financing Activities    (27,857)      (2,558)
_________________________________________________________________
Effect of Exchange Rate Changes on Cash        (117)         551
_________________________________________________________________
   Net Increase in Cash and Cash
    Equivalents                             197,169       54,071
_________________________________________________________________
Cash and Cash Equivalents at Beginning
 of Period                                  102,370       76,564
_________________________________________________________________
Cash and Cash Equivalents at End of Period $299,539     $130,635
_________________________________________________________________
_________________________________________________________________

SUPPLEMENTAL DATA:
_________________________________________________________________
Cash Paid (Received) for:
Interest, Net of Capitalized Interest      $ 42,306      $45,073
Income Taxes, Net of Refunds               $ (2,360)     $17,671
_________________________________________________________________
Noncash Investing Activities:
Notes Receivable from the Sale of
  Distribution Services                                  $ 6,000
_________________________________________________________________

See notes to consolidated financial statements.
<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 1.   Significant Accounting Policies

     The  consolidated  financial statements  presented  herein
include  the  accounts  of  APL Limited  and  its  wholly-owned
subsidiaries  (the  "company") and have been  prepared  by  the
company,  without audit, pursuant to the rules and  regulations
of   the  Securities  and  Exchange  Commission.   The  company
believes  that  the  disclosures  are  adequate  to  make   the
information   presented   not  misleading,   although   certain
information  and  footnote  disclosures  normally  included  in
financial  statements  prepared in  accordance  with  generally
accepted  accounting principles have been condensed or  omitted
pursuant  to  such rules and regulations.  In  the  opinion  of
management,  the consolidated financial statements reflect  all
adjustments  (consisting only of normal recurring  adjustments)
necessary  for a fair presentation of the company's results  of
operations,   financial   position   and   cash   flows.    The
consolidated financial statements should be read in conjunction
with  the  consolidated  financial  statements  and  the  notes
thereto  included in the company's Annual Report on  Form  10-K
for  the year ended December 27, 1996 (Commission File  No.  1-
8544).

Foreign Currency Instruments

     The  company  periodically enters into  contracts  to  buy
foreign currencies in the future to hedge the impact of foreign
currency  fluctuations on certain operating  commitments.   The
gains  or  losses on contracts related to firm commitments  are
deferred and recognized when the related operating expenses are
incurred,  and  are  recorded as  a  decrease  or  increase  in
Expenses on the accompanying Consolidated Statement of  Income.
Gains  or  losses  on  foreign currency  contracts  related  to
anticipated  transactions  are reflected  in  Expenses  on  the
accompanying Consolidated Statement of Income in the period  in
which the currency fluctuation occurs.

Capitalized Interest

     Interest  costs relating to cash paid for construction  of
port facilities were capitalized in 1997 and 1996.  These costs
totaled $0.2 million and $1.4 million for the third quarter and
the  three quarters ended September 19, 1997, respectively, and
$0.2  million  and $0.5 million for the third quarter  and  the
three quarters ended September 20, 1996, respectively.

Income Taxes

     The  provision for income taxes has been calculated  using
the effective tax rate estimated for the respective years.  The
company's  estimated  income  tax  rate  for  the  first  three
quarters  of 1997 was 30%.  During the first quarter  of  1997,
the  company  also  recorded  a tax  benefit  of  $2.0  million
relating  to  a  prior year state income tax  settlement.   The
effective income tax rate for the first three quarters of  1996
was  35%.   The full year effective tax rate for 1996 was  33%,
which  was  reduced during 1996 to reflect the availability  of
additional tax credits and deductions.


Note 2.   Operating-Differential Subsidy Agreement

     The  company and the United States Maritime Administration
("MarAd")  are  parties  to  an Operating-Differential  Subsidy
("ODS")  agreement expiring December 31, 1997,  which  provides
for  payment by the U.S. government to partially compensate the
company  for  the  relatively greater labor expense  of  vessel
operation  under United States registry.  The ODS amounts  were
$6.7 million and $10.7 million for the quarters ended September
19,  1997  and  September  20, 1996,  respectively,  and  $21.4
million          and         $36.1         million          for
<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 2.   Operating-Differential Subsidy Agreement (continued)

the  three quarters ended September 19, 1997 and September  20,
1996,  respectively, and have been included as a  reduction  of
Expenses on the accompanying Consolidated Statement of  Income.
MarAd  has  determined  that the ODS agreement  will  terminate
immediately prior to the company's proposed merger with Neptune
Orient Lines Limited ("NOL") discussed in Note 8.


Note 3.Accounts Payable and Accrued Liabilities

      Accounts payable and accrued liabilities at September 19,
1997 and December 27, 1996, were as follows:
_________________________________________________________________
(In thousands)                         September 19 December 27
                                               1997        1996
_________________________________________________________________
Accounts Payable                           $ 74,354     $52,316
Accrued Liabilities                         271,127     250,523
Current Portion of Insurance Claims          13,405      15,326
Unearned Revenue                             59,582      50,566
Restructuring Charge                          1,721      11,959
_________________________________________________________________
Total Accounts Payable and
 Accrued Liabilities                       $420,189    $380,690
_________________________________________________________________
_________________________________________________________________


Note 4.   Long-Term Debt

     Long-Term Debt at September 19, 1997 and December 27, 1996
consisted of the following:
_________________________________________________________________
(In thousands)                         September 19 December 27
                                               1997        1996
_________________________________________________________________
Vessel Mortgage Notes Due
 Through 2008 (1)                          $365,994    $380,880
8% Senior Debentures $150 million Face
 Amount Due on January 15, 2024 (2)         147,219     147,198
7 1/8% Senior Notes $150 million Face
 Amount Due on November 15, 2003 (2)        148,534     148,399
Series I 8% Vessel Mortgage Bonds
  Due Through 1997(3)                                     9,530
8% Refunding Revenue Bonds Due
 on November 1, 2009                         12,000      12,000
Other                                         6,922       7,069
_________________________________________________________________
Total Debt                                  680,669     705,076
Current Portion                                          (9,530)
_________________________________________________________________
Total Long-Term Debt                       $680,669    $695,546
_________________________________________________________________
_________________________________________________________________

(1)To  finance a portion of the purchase price of its six  C11-
   class  vessels, the company borrowed $402.1 million in  1995
   and 1996 under a loan agreement with European banks pursuant
   to  vessel  mortgage  notes  due  through  2008.   Principal
   payments  are due in semiannual installments over a  12-year
   period  commencing  six months after  the  delivery  of  the
   respective  vessels.  The interest rates on  the  notes  are
   based upon various margins over LIBOR or the banks' cost  of
   funds,   as  elected  by  the  company.   Until  the   sixth
   anniversary of the delivery date, the company may  defer  up
   to four principal payments.  Aggregate deferred payments are
   due at the end of the term of the notes.  Principal payments
   on  this debt are classified as long-term on the basis  that
   the  company has the ability to defer at least two payments.
   The   notes   issued   under   this   loan   agreement   are
   collateralized by the C11-class vessels.

<PAGE>
APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 4.   Long-Term Debt (continued)

   The  company  entered into interest rate swap agreements  on
   four of the vessel mortgage notes, with a notional amount of
   $251.5  million  at  September 19,  1997,  to  exchange  the
   variable  interest rate obligations on such notes for  fixed
   rate  obligations for initial periods ranging between 7  and
   12  years.  The current variable interest rates for  all  of
   the  vessel  mortgage notes range between 6.735% and  7.02%.
   As a result of the swaps, the effective interest rates range
   between  6.625%  and 7.531% for the first five  years  after
   inception, and 6.625% and 7.656% for the remaining terms  of
   the  swaps.   Net payments or receipts under the  agreements
   are included in interest expense.

(2)The  company  issued  7  1/8% Senior  Notes  and  8%  Senior
   Debentures  in November 1993 and January 1994, respectively.
   Interest  payments are due semiannually.  The  Senior  Notes
   had an effective interest rate of 7.325%, and an unamortized
   discount of $1.5 million at September 19, 1997.  The  Senior
   Debentures had an effective interest rate of 8.172%, and  an
   unamortized discount of $2.8 million at September 19, 1997.

(3)The  Series I Vessel Mortgage Bonds were fully repaid during
   the first quarter of 1997.

     The  company has a credit agreement with a group of  banks
which  provides  for an aggregate commitment  of  $200  million
through March 1999.  The credit agreement contains, among other
things, various financial covenants that require the company to
meet  certain  levels  of interest and fixed  charge  coverage,
leverage and net worth.  The borrowings bear interest at  rates
based  upon  various indices as elected by the company.   There
have been no borrowings under this agreement.

     As an alternative to borrowing under its credit agreement,
the  company has an option under that agreement to sell  up  to
$150  million  of  certain of its accounts  receivable  to  the
banks.    This  alternative  is  subject  to  less  restrictive
financial covenants than the borrowing option.
     
     Consummation of the proposed merger with NOL may result in
the  termination  of  the company's credit  agreement  and  its
option under that agreement to sell accounts receivable.


Note 5.   Leases

     In  connection with its new terminal in Los  Angeles,  the
company  entered into an agreement to purchase new cranes  and,
in  April  1997,  reached an agreement with a  group  of  banks
pursuant to which the company assigned its rights to the cranes
to  the  banks, and the banks leased the cranes to the company,
subject  to  certain  terms and conditions  on  a  year-to-year
basis.   Under the agreement, the company made all payments  to
the  crane manufacturer and was subsequently reimbursed by  the
banks.   The  payments and receipts have been included  in  the
Consolidated  Statement of Cash Flows as  Capital  Expenditures
and   Proceeds  from  the  Sales  of  Property  and  Equipment,
respectively.   The cost of the cranes included  in  the  lease
transaction is approximately $81.5 million.  Under the terms of
its  agreement, the company has annual options to either  renew
the  lease, purchase the cranes or arrange for the sale of  the
cranes  to  a  third party.  As part of the  sale  option,  the
company has guaranteed the lessors a minimum estimated value of
$58.9  million  at September 19, 1997 which will  decline  over
time.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 6.   Stockholders' Equity

Earnings Per Common Share

     For the periods presented, earnings per common share on  a
primary  and fully diluted basis were computed by dividing  net
income  by  the  weighted average number of common  shares  and
common  equivalent shares outstanding.  The  number  of  shares
used in these computations was as follows:

____________________________________________________________________
Weighted Average Number of Common and Common Equivalent Shares
____________________________________________________________________
(In millions)                Quarter Ended            38 Weeks Ended
                 September 19 September 20 September 19 September 20
                         1997         1996         1997         1996
____________________________________________________________________
Primary                  26.1         26.3         25.6         26.3
Fully Diluted            26.1         26.3         26.0         26.3
____________________________________________________________________
____________________________________________________________________

     Weighted  average shares for the third quarter  and  first
three  quarters of 1997 reflect the repurchase of  1.3  million
shares  of  the companyOs common stock in the third and  fourth
quarters of 1996.  In addition, weighted average shares for the
third  quarter  and first three quarters of  1996  reflect  the
repurchase of 0.6 million shares of the companyOs common  stock
in the third quarter of 1996.

     In February 1997, the Financial Accounting Standards Board
issued  Statement  of Financial Accounting Standards  No.  128,
"Earnings per Share", which is effective for interim and annual
periods  ending  after December 15, 1997 (early application  is
not  permitted).  Under this new standard, primary earnings per
share  and fully diluted earnings per share have been  replaced
by  basic  earnings per share and diluted earnings  per  share.
Basic  earnings per share is calculated by dividing net  income
by  the  weighted  average number of common shares  outstanding
during the period.  Diluted earnings per share is calculated by
dividing  net income by the weighted average number  of  common
shares  outstanding during the period plus the dilutive  effect
of  stock options outstanding.  For the third quarter and first
three quarters of 1997 and 1996, basic and diluted earnings per
share would have been as follows:
     
___________________________________________________________________
                            Quarter Ended            38 Weeks Ended
                September 19 September 20 September 19 September 20
                        1997         1996         1997         1996
___________________________________________________________________
Basic                  $0.46        $1.10        $0.37        $2.06
Diluted                $0.44        $1.07        $0.35        $2.01
___________________________________________________________________
___________________________________________________________________
     
     
Note 7.   Commitments and Contingencies

Commitments

Alliances
     
     The   alliance  agreements  between  the  company,  Orient
Overseas  Container  Line  ("OOCL"),  Mitsui  OSK  Lines,  Ltd.
("MOL"),    Nedlloyd   Lines   B.V.   ("NLL")   and   Malaysian
International  Shipping Corporation BHD ("MISC"),  collectively
referred  to as the Global Alliance, were fully implemented  in
the first quarter of 1996.
     
<PAGE>
APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 7.   Commitments and Contingencies (continued)

Commitments (continued)

Alliances (continued)

     NLL  merged  with  the container line  operations  of  The
Peninsular  and  Oriental Steam Navigation Company  ("P&O")  on
December  31, 1996 to form P&O Nedlloyd Container Line  Limited
("P&O-NL").   P&O-NL has advised the Global Alliance  that  NLL
will  be  withdrawing  from the Global  Alliance.   The  future
alliance participation of the company following consummation of
the  proposed merger of the company and NOL, discussed in  Note
8, has not yet been determined.  The company cannot predict, if
the   proposed   merger  is  consummated,  when  the   alliance
participation of the company and NOL will be determined or  the
resulting  impact  on the operations of the company.   However,
while no assurances can be given, the company believes that  it
will be able to reach acceptable agreements for future alliance
participation.
     
     In July 1997, the company and the remaining members of the
Global  Alliance entered into a letter of intent  with  Hyundai
Merchant Marine Co. Ltd. ("Hyundai") to enter into a multi-year
agreement to share vessel space and coordinate vessel  sailings
in  the  trans-Pacific  and Asia-Europe  trades.   The  parties
expect  to  complete detailed agreements and vessel deployments
and  obtain necessary government approvals by the end of  1997,
and  to initiate new services during the first quarter of 1998.
The  five carriers began exchanging vessel space in the  trans-
Pacific and Asia-Europe trades on a limited basis late  in  the
third  quarter of 1997.  There can be no assurances whether  or
when  the  detailed agreements will be completed or  government
approvals will be obtained.

     In  June  1997,  the  company and Transportacion  Maritima
Mexicana  ("TMM")  entered  into  a  joint  operating   company
agreement pursuant to which the companies began offering trans-
Pacific  services  in July 1997 in the Asia-Mexico  trade.   As
part  of  the agreement, the company is managing the operations
of  six  time chartered vessels and is guarantying the  charter
hire of five vessels, two of which it had previously agreed  to
guarantee.  The charter hire payments for the additional  three
vessels  guaranteed through the expiration of the  charters  in
1999  are  estimated to be $43.9 million.  Agreements necessary
to implement the transaction are being finalized.
     
Facilities, Equipment and Services

     The  company  had  outstanding  purchase  commitments   to
acquire  facilities,  equipment  and  services  totaling  $24.2
million  at  September 19, 1997.  In addition, the company  has
commitments  to purchase terminal services for its major  Asian
operations.  These commitments range from one to ten years, and
the  amounts of the commitments under these contracts are based
upon  actual  services performed.  At September 19,  1997,  the
company  had outstanding letters of credit and other agreements
totaling   $77.0   million,  which  guarantee   the   company's
performance under certain of its commitments.
     
Employment Agreements

     The  company  has entered into employment agreements  with
certain  of  its officers.  The agreements provide for  certain
payments to each officer upon termination of employment,  other
than  as  a  result  of death, disability  in  most  cases,  or
justified   cause,   as   defined.   The  aggregate   estimated
commitment   under  these  agreements  was  $16.6  million   at
September  19,  1997.   Certain of these employment  agreements
contain  provisions  requiring additional  payments,  including
excise taxes and supplemental pension benefits, if applicable.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 7.   Commitments and Contingencies (continued)

Contingencies

     In October 1995, Lykes Bros. Steamship Co., Inc. ("Lykes")
filed  a  petition seeking protection from its creditors  under
Chapter  11 of the U.S. Bankruptcy laws.  The company chartered
vessels  from  Lykes,  and  Lykes chartered  vessels  from  the
company.   In  July  1996,  the  Bankruptcy  Court  approved  a
settlement   agreement   between   the   company   and   Lykes,
establishing  terms  for the payment of  the  company's  claims
against  Lykes for unpaid charter hire.  The settlement allowed
Lykes  the use of three of the company's vessels until December
31,  1997 and required Lykes to obtain the release of liens  it
permitted to be established against those vessels.
     
     In   April   1997,  Lykes'  Plan  of  Reorganization   was
confirmed,  and  on July 29, 1997, Lykes and Canadian  Pacific,
Ltd.  ("CP")  finalized its agreement for CP's  acquisition  of
Lykes'  U.S.  container shipping services.   In  addition,  the
company and CP reached an agreement which allows the company to
realize most of the remaining benefits due under its settlement
with Lykes and vessels chartered by Lykes from the company were
returned  to the company.  Appeals of certain Bankruptcy  Court
orders underlying the company's agreement with Lykes have  been
dismissed.   As a result of the settlement and CP  acquisition,
LykesO  bankruptcy is not expected to have a  material  adverse
impact  on  the  company's consolidated financial  position  or
results of operations.
     
     The  company  is  a  party to various  legal  proceedings,
claims  and  assessments arising in the course of its  business
activities.  Based upon information presently available, and in
light  of  legal and other defenses and insurance coverage  and
other  potential sources of payment available to  the  company,
management does not expect these legal proceedings, claims  and
assessments,  individually  or in  the  aggregate,  to  have  a
material adverse impact on the company's consolidated financial
position or operations.


Note 8.   Proposed Merger with Neptune Orient Lines Limited

      On  April  13,  1997, the company entered into  a  merger
agreement  with  NOL,  a  Singapore  corporation,  and  Neptune
U.S.A.,  Inc., a Delaware corporation and an indirect,  wholly-
owned  subsidiary of NOL ("Sub"), pursuant to  which  Sub  will
merge with and into the company (the "Proposed Merger").  As  a
result  of the Proposed Merger, the outstanding shares  of  the
company's  stock  will be converted into the right  to  receive
$33.50  per share in cash and the company will become a wholly-
owned  subsidiary of NOL.  The Proposed Merger, which has  been
approved  by  each  company's Board of  Directors  and  by  the
holders  of  a  majority  of  the  outstanding  shares  of  the
company's Common Stock, is subject to certain other conditions,
including  approval by MarAd of the transfer of  the  company's
Maritime  Security  Program ("MSP") operating  agreements.   On
October  16,  1997,  MarAd approved the  transfer  to  be  made
immediately prior to the Proposed Merger, subject to the review
of  the  Secretary of Transportation.  The company  expects  to
consummate the Proposed Merger in mid-November 1997,  following
completion of such review.

<PAGE>
APL Limited and Subsidiaries

Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
       CONDITION AND RESULTS OF OPERATIONS

       Management's  Discussion  and  Analysis   of   Financial
Condition  and  Results of Operations for the  quarter  and  38
weeks  ended  September 19, 1997 should be read in  conjunction
with   Management's  Discussion  and  Analysis   of   Financial
Condition  and Results of Operations included in the  company's
Annual  Report  on  Form 10-K for the year ended  December  27,
1996.

Proposed Merger with Neptune Orient Lines Limited

     On  April  13,  1997, the company entered  into  a  merger
agreement with NOL, and Neptune U.S.A., Inc. ("Sub"),  pursuant
to which Sub will merge with and into the company.  As a result
of the Proposed Merger, the outstanding shares of the company's
stock  will  be converted into the right to receive $33.50  per
share  in  cash  and  the  company will become  a  wholly-owned
subsidiary  of  NOL.   The  Proposed  Merger,  which  has  been
approved  by  each  company's Board of  Directors  and  by  the
holders  of  a  majority  of  the  outstanding  shares  of  the
company's Common Stock, is subject to certain other conditions,
including  approval by MarAd of the transfer of  the  company's
MSP  operating agreements.  On October 16, 1997, MarAd approved
the  transfer  to  be made immediately prior  to  the  Proposed
Merger,   subject   to   the  review  of   the   Secretary   of
Transportation.  The company expects to consummate the Proposed
Merger  in mid-November 1997, following the completion of  such
review.
     
RESULTS OF OPERATIONS

Summary Results            Third Quarter        Year to Date

(In millions)            1997   1996 Change    1997     1996 Change
___________________________________________________________________
Revenues
Container
 Transportation       $563.7 $ 556.0   1%  $1,692.9  $1,749.9  (3%)
Logistics Services
 and Other              89.5    90.2  (1%)    265.8     263.7   1%
___________________________________________________________________
Operating Income      $ 23.9 $  48.9 (51%) $   33.7  $  109.0 (69%)
___________________________________________________________________
Pretax Income         $ 16.7 $  40.9 (59%) $   10.0  $   81.4 (88%)
___________________________________________________________________
___________________________________________________________________

Overview

     Operating  income for the third quarter  and  first  three
quarters   of  1997  was  $23.9  million  and  $33.7   million,
respectively,  compared with operating  income  for  the  third
quarter  and first three quarters of 1996 of $48.9 million  and
$109.0 million, respectively.  Included in operating income for
the  third quarter of 1997 was a gain of $16.2 million from the
sale of lease receivables related to five barges, an additional
gain  of  $2.0 million from the favorable settlement of  claims
related  to  the 1994 collision of a vessel and costs  of  $2.7
million  related to the proposed merger with NOL.  In  addition
to  the  items  above,  operating income for  the  first  three
quarters of 1997 also included a gain of $5.3 million from  the
sale  of  chassis,  a gain of $3.0 million from  the  favorable
settlement of claims related to the 1994 collision of a vessel,
a  gain of $1.5 million from the favorable settlement of claims
related  to the 1995 Kobe earthquake and costs of $2.7  million
related to the proposed merger with NOL.  Included in operating
income  for  the  third quarter of 1996 was  a  gain  of  $12.9
million  resulting  from  the curtailment  of  obligations  for
pension   and   postretirement  benefits   due   to   workforce
reductions.   Also included in operating income for  the  first
three  quarters  of  1996 was a second  quarter  gain  of  $6.9
million  on  the  sale  of the company's domestic  distribution
services segment of its freight brokerage business, and a  $1.6
million  gain from the sale of a vessel which occurred  in  the
first quarter.

<PAGE>

     In  the  third  quarter of 1997 compared  with  the  third
quarter  of 1996, the company's earnings decreased as a  result
of  reduced container transportation revenues per unit  due  to
significant  rate  pressure and increased  expenses,  primarily
ocean  transportation.  The reduced revenues per unit  and  the
increased expenses were partially offset by increased container
transportation revenues reflecting increased volumes in most of
the  company's markets.  The company's earnings also  decreased
in  the  first  three quarters of 1997 compared with  the  same
period in 1996, as a result of reduced container transportation
revenues  per  unit  in  most  of the  company's  markets.   In
addition, the decrease in revenues in the first three  quarters
of  1997  was compounded by an increase in expenses as compared
with the first three quarters of 1996.


CONTAINER VOLUMES           Third Quarter       Year to Date

  BY MAJOR MARKET (1)     1997  1996 Change   1997  1996 Change
_________________________________________________________________
Asia to North America     54.2  52.9   3%    141.1 133.6   6%
North America to Asia     27.9  26.5   6%     89.4  92.5  (3%)
Intra-Asia                46.7  36.6  28%    142.6 112.3  27%
Asia-Europe               11.1  10.1  10%     32.1  28.8  12%
Latin America              7.5   4.5  66%     20.4  11.1  84%
Refrigerated              10.2  11.5 (11%)    35.6  36.8  (3%)
Stacktrain               106.4  94.0  13%    336.5 287.5  17%
Automotive                15.4  16.6  (7%)    49.7  65.8 (24%)
_________________________________________________________________
_________________________________________________________________
(1)Volumes  are  stated  in thousands of forty-foot  equivalent
   units ("FEUs"), except Stacktrain and Automotive, which  are
   stated  in  thousands of shipments.  Volumes data are  based
   upon  shipments originating during the period, which differs
   from  the percentage-of-completion method used for financial
   reporting purposes.

Asia to North America

     The  company's volumes increased in the third  quarter  of
1997 compared with the comparable 1996 period due primarily  to
strong  export activities in North and South China  and  Korea.
Volume  increases in the first three quarters of 1997  compared
with  the  first three quarters of 1996 were due  primarily  to
strong  export activities in North and South China,  India  and
Singapore.   Lower  manufacturing costs in China  have  shifted
customer   production  facilities  to  that   region,   thereby
increasing volumes from that area.

North America to Asia

     The  company's  volumes increased in this  market  in  the
third  quarter of 1997 compared with the third quarter of  1996
due  primarily to increased shipments to North and South China,
Hong  Kong  and Japan due to increased demand in those  markets
during  the  quarter.  Volumes declined in this market  in  the
first  three  quarters of 1997 compared with  the  first  three
quarters of 1996 due primarily to decreased shipments to  North
China, Hong Kong and Indonesia.  The decreased volumes for  the
first  three quarters of 1997 are the result of reduced  demand
in  this  market  compared to the comparable 1996  period.   In
addition, the sale by the company of five vessels and its  Guam
business to Matson Navigation Company, Inc. ("Matson")  in  the
first  quarter of 1996 also contributed to the decline  in  the
company's  volumes in the first three quarters  of  1997.   The
changes  in  volumes  in  the third  quarter  and  first  three
quarters  of 1997, compared with last year's third quarter  and
first  three quarters, also reflect increased military  cargoes
to Japan and Korea as a result of the company's increased share
of military business under the U.S. government's contract award
program.

<PAGE>

Intra-Asia

     The  company's intra-Asia volumes increased in  the  third
quarter  and first three quarters of 1997 compared with similar
periods in 1996 primarily as a result of increased shipments to
and  from  Taiwan  and Japan.  The increased volumes  were  the
result of focused marketing efforts in this market.

Asia-Europe

     The company's volumes increased eastbound and westbound in
the third quarter of 1997 as compared with the third quarter of
1996.   Eastbound volumes increased due to shipments  from  the
Netherlands,  Germany  and  Belgium  as  the  company   pursued
additional cargo.  Westbound volumes increased due to shipments
from North and South China and India reflecting market strength
due to seasonal factors and the company's pursuit of additional
cargo.  Volumes increased in both directions in the first three
quarters  of 1997 over the first three quarters of  1996  as  a
result of the company's pursuit of additional cargo in order to
gain   market  share.   Eastbound  volumes  increased  due   to
shipments from the Netherlands, the United Kingdom, Belgium and
Germany, and westbound volumes increased due to shipments  from
North and South China, Thailand and Taiwan.
     
Latin America

     The  company's  volumes in this market  increased  in  the
third  quarter  and first three quarters of 1997 compared  with
the  third  quarter  and  first  three  quarters  of  1996  due
primarily  to  increased  eastbound shipments  from  Indonesia,
South  China and Taiwan to Mexico and Panama.  The increase  in
volumes  resulted  from  more focused  marketing  efforts.   In
addition,  westbound and intra-Caribbean volumes also increased
during  the  periods due to the introduction of intra-Caribbean
services in mid-1996 and increased marketing efforts.

Refrigerated

     The  company's refrigerated volumes decreased in the third
quarter of 1997 compared with the third quarter of 1996 in most
of   the   company's   markets,  with  the  intra-Asia   market
contributing  the  largest decline.  Compared  with  the  first
three quarters of 1996, volumes of refrigerated cargo decreased
in  1997  due  to  decreased volumes in the intra-Asia  market,
partially  offset  by increased exports to  Japan,  Hong  Kong,
Indonesia and the United Arab Emirates.  The changes in volumes
resulted from changes in overall demand in the markets in which
the company operates.

Stacktrain

     The  company's North America stacktrain volumes  increased
significantly in the third quarter and first three quarters  of
1997  compared with last year's third quarter and  first  three
quarters  due  to  growth in demand and the  company's  pricing
strategies  to  remain competitive.  Partially  offsetting  the
increase  in the first three quarters of 1997 was the  loss  of
volumes  related to the sale of the company's rights to service
certain domestic intermodal customers in the second quarter  of
1996.

Automotive

     The  company's automotive volumes declined  in  the  third
quarter and first three quarters of 1997 compared with the same
periods  in 1996, due to reduced stacktrain shipments  by  U.S.
automobile  manufacturers between the  U.S.  and  Mexico  as  a
result  of  changes  in  the  mode of  rail  shipments  by  the
manufacturers.

<PAGE>     

AVERAGE REVENUE
 PER UNIT (1)              Third Quarter       Year to Date

                          1997   1996 Change   1997   1996 Change
_________________________________________________________________
Trans-Pacific           $3,129 $3,365  (7%)   $3,165$3,464  (9%)
Other  Ocean 
 Transportation         $1,778 $2,086 (15%)  $1,816 $2,151 (16%)
Stacktrain              $1,192 $1,211  (2%)  $1,182 $1,270  (7%)
_________________________________________________________________
_________________________________________________________________
(1)Average  revenue  per  unit is stated in  FEUs,  except  for
   Stacktrain, which is in shipments.  Average revenue per unit
   data are based upon shipments originating during the period,
   which differs from the percentage-of-completion method  used
   for  financial reporting purposes.  Stacktrain  revenue  per
   unit includes Automotive.

Trans-Pacific

     In the third quarter and first three quarters of 1997, the
company's  trans-Pacific average revenue per FEU declined  from
the  same  periods  in 1996 due primarily to  significant  rate
pressures  in  the Asia to North America market resulting  from
capacity slightly outpacing growth in trade, and continued rate
reductions  by  the company and its competitors.   Considerable
rate  instability  persists in this  market,  and  the  company
cannot  predict  whether rate reductions will  continue  to  be
taken  by  the  company or its competitors in the remainder  of
1997  or  in  1998, or the extent of such reductions,  if  any.
Continued destabilization of rates, if extensive, could have  a
material  adverse  impact  on  the  results  of  operations  of
carriers,  including  the company.  Lower  rates  and  a  lower
percentage  of  high value cargo in the North America  to  Asia
market  also contributed to lower trans-Pacific average revenue
per FEU.

Other Ocean Transportation

     The  company's average revenue per FEU in its other  ocean
transportation markets decreased in the third quarter and first
three  quarters  of  1997 compared with the third  quarter  and
first  three quarters of 1996, due primarily to an increase  in
lower-rated,  short-leg  cargo in the intra-Asia  market.   The
decrease in average revenue per FEU was compounded by continued
rate  deterioration in the Asia-Europe market  throughout  1996
and  the  first  three quarters of 1997 due  to  excess  vessel
capacity and significant rate pressure as carriers competed for
market share.

Stacktrain

     The  company's  average  revenue per  stacktrain  shipment
declined in the third quarter and first three quarters of  1997
compared  with the same periods in 1996 primarily due to  lower
rates resulting from increased competition and excess equipment
capacity in this market.
     
Logistics Services and Other Revenues

     Logistics Services and Other Revenues, which include cargo
handling, freight consolidation, logistics services and charter
hire revenues, totaled $89.5 million and $265.8 million in  the
third  quarter  and first three quarters of 1997, respectively,
and  $90.2 million and $263.7 million during comparable periods
of 1996.  The decrease in Logistics Services and Other Revenues
in  the third quarter of 1997 compared to the third quarter  of
1996,  reflects  reduced cargo handling revenues  in  Asia  and
North  America  due to TMM's discontinued service  between  the
U.S.  and  Asia,  partially offset by increased cargo  handling
revenues  from  other  third  parties  and  revenues  from  the
company's  joint  venture  with TMM.   The  increase  in  these
revenues for the first three quarters of 1997 compared with the
same  periods  in  1996 reflects increased cargo  handling  and
logistics  services  revenues  partially  offset  by  decreased
charter hire revenues.

<PAGE>

Outlook

     Rate  pressures  are continuing in most of  the  company's
major  markets as increased capacity continues to exceed market
growth.  In addition, the company is incurring increased  costs
due  to  the  service problems of a major  rail  carrier.   The
company  currently  expects that, taking  into  account  volume
increases  and  its  focus  on cost reductions,  the  company's
results  (exclusive of merger-related costs) will be at  break-
even  or  a  modest loss for the second half and full  year  of
1997.   Aggregate  costs  to  be incurred  by  the  company  in
connection with the Proposed Merger will be substantial.

Alliances

     The  alliance agreements between the company,  OOCL,  MOL,
NLL  and MISC, collectively referred to as the Global Alliance,
were fully implemented in the first quarter of 1996.

     NLL  merged with the container line operations of  P&O  on
December  31,  1996  to form P&O-NL.  P&O-NL  has  advised  the
Global  Alliance that NLL will be withdrawing from  the  Global
Alliance.   The  future alliance participation of  the  company
following  consummation of the proposed merger of  the  company
and NOL, discussed in Note 8 of Notes to Consolidated Financial
Statements,  has not yet been determined.  The  company  cannot
predict,  if  the  proposed  merger is  consummated,  when  the
alliance  participation  of  the  company  and  NOL   will   be
determined  or  the resulting impact on the operations  of  the
company.   However,  while  no assurances  can  be  given,  the
company  believes  that  it will be able  to  reach  acceptable
agreements for future alliance participation.
     
     In July 1997, the company and the remaining members of the
Global Alliance entered into a letter of intent with Hyundai to
enter  into  a multi-year agreement to share vessel  space  and
coordinate vessel sailings in the trans-Pacific and Asia-Europe
trades.  The parties expect to complete detailed agreements and
vessel deployments and obtain necessary government approvals by
the  end of 1997, and to initiate new services during the first
quarter  of  1998.   The five carriers began exchanging  vessel
space  in the trans-Pacific and Asia-Europe trades on a limited
basis  late  in  the third quarter of 1997.  There  can  be  no
assurances  whether  or when the detailed  agreements  will  be
completed or government approvals will be obtained.
     
     In  June  1997, the company and TMM entered into  a  joint
operating  company  agreement pursuant to which  the  companies
began offering trans-Pacific services in July 1997 in the Asia-
Mexico  trade.   As  part  of  the agreement,  the  company  is
managing  the operations of six time chartered vessels  and  is
guarantying the charter hire of five vessels, two of  which  it
had  previously agreed to guarantee.  The charter hire payments
for   the  additional  three  vessels  guaranteed  through  the
expiration  of the charters in 1999 are estimated to  be  $43.9
million.  Agreements necessary to implement the transaction are
being finalized.

Maritime Regulation and Subsidy

     Under  the  company's  ODS  agreement  with  MarAd,  which
expires  December  31,  1997,  payments  to  the  company  were
approximately  $6.7  million and $21.4  million  in  the  third
quarter  and  first  three quarters of 1997, respectively,  and
$10.7  million and $36.1 million during comparable  periods  of
1996.  ODS payments in 1997 have been substantially lower  than
in  1996 as a result of a reduction in the number of U.S.  flag
vessels operated by the company.  During 1996, the company sold
five  U.S.  flag vessels and returned five chartered U.S.  flag
vessels.

     In  October  1996, the Maritime Security Act of  1996  was
signed  into  law.  This legislation provides  for  a  Maritime
Security Program administered by MarAd with up to $100  million
in  payments  per annum to be appropriated by  Congress  on  an
annual  basis.  MSP provides $2.1 million per vessel per  year,
compared with up to $3.6 million per vessel per year under ODS,
and will expire on October 1, 2005.

<PAGE>

     In  January  1997, the company signed operating agreements
under MSP for nine ships, including five C10-class vessels  and
four  C11-class vessels.  The company has a one-year period  in
which  to  begin  the  participation of those  vessels  in  the
program.  Vessels participating in MSP must be registered under
U.S. flag and manned by U.S. crews and must participate in  the
Emergency  Preparedness  Program established  by  the  Maritime
Security  Act.   Certain  U.S.  citizenship  requirements   are
applicable   to  the  participating  carrier.    Transfers   of
operating  agreements and substitution of vessels are permitted
under specified circumstances, subject to the prior approval of
MarAd.   In  connection with the Proposed Merger, on  June  25,
1997,  the company submitted a notice to MarAd detailing  plans
to  transfer  its  ODS  agreement and its  nine  MSP  Operating
Agreements  to American Ship Management, LLC ("ASM"),  a  newly
formed,   U.S.-owned  and  operated  company   that   will   be
independent of the company and NOL.  The filing requested  that
MarAd  allow the transfer to become effective immediately prior
to  consummation of the Proposed Merger between the company and
NOL.  On October 16, 1997, MarAd approved the proposed transfer
of  the  company's  MSP operating agreements, approved  certain
other  agreements  and  transfers,  and  determined  that   the
company's ODS agreement will terminate immediately prior to the
Proposed  Merger.  The approvals are subject to review  by  the
U.S.  Secretary of Transportation and do not become final until
the  expiration of 20 days (25 days if an appeal is filed), and
the  U.S. Secretary of Transportation can further postpone  the
effective  date of the action.  The company and NOL resubmitted
a  voluntary notice with respect to the Proposed Merger to  the
Staff  Chairman of the Committee on Foreign Investment  in  the
United  States  ("CFIUS") pursuant to the Exon-Florio  laws  on
September  22, 1997.  On October 22, 1997, CFIUS  notified  the
company and NOL that it had completed its review.
     
     Subject  to  completion of the review by the Secretary  of
Transportation, the company expects to consummate the  Proposed
Merger in mid-November 1997.
     
     The company's collective bargaining agreement covering its
unlicensed  personnel expires in June 1999 and  its  agreements
with three unions representing its licensed personnel expire in
June  2005.  All of these contracts have been ratified  by  the
unions'   members  and  will  be  adopted  by  ASM   upon   the
consummation of the Proposed Merger.
     
     In 1997, legislation was introduced in the U.S Senate that
would  substantially  modify the  Shipping  Act  of  1984  (the
"Shipping  Act").   The  Shipping  Act,  among  other   things,
provides the company with certain immunity from antitrust  laws
and  requires  the company and other carriers in  U.S.  foreign
commerce to file tariffs publicly.  The legislation would amend
the  Shipping Act to mandate the right of independent contracts
between shippers and ocean carriers, allow contract terms to be
treated   confidentially  except  for   specific   terms,   and
strengthen  remedies to combat predatory activities by  foreign
carriers.   Limited continuing oversight by a successor  agency
to  the  Federal Maritime Commission would continue under  this
legislation, with no change to the companyOs existing antitrust
immunity.   The  company is unable to predict whether  this  or
other  proposed  legislation will  be  introduced  or  enacted.
Enactment  of legislation modifying the Shipping Act, depending
upon its terms, could have a material impact on the competitive
environment in which the company operates and on the  company's
results  of  operations.  The company is unable to predict  the
nature or extent of the impact of this legislation, if enacted.

<PAGE>

EXPENSES                   Third Quarter        Year to Date

(In millions)             1997    1996 Change   1997      1996 Change
_____________________________________________________________________
 Transportation
  Land                  $209.0 $209.2 (<1%) $  637.5  $  672.5 (5%)
  Ocean                  118.7   95.9  24%     334.9     308.8  8%
  Equipment               64.5   58.7  10%     195.2     184.5  6%
 Cargo Handling          169.1  167.8   1%     508.7     481.7  6%
 Sales, General &
  Administrative          83.5   78.6   6%     271.3     278.5 (3%)
 Other (Income) Expense  (15.5) (12.9) 20%     (22.6)    (21.4) 5%
_____________________________________________________________________
 Total                  $629.3 $597.3   5%  $1,925.0  $1,904.6  1%
_____________________________________________________________________
 Operating Ratio (1)      99%    94%            99%       96%
_____________________________________________________________________
_____________________________________________________________________
(1)Other (Income)/Expense is excluded from this calculation.

Land Transportation

     Land  transportation expenses decreased  slightly  in  the
third  quarter of 1997 from the third quarter of 1996,  due  to
decreases in domestic automotive and freight brokerage  volumes
as  a  result  of the sale of the company's rights  to  service
certain domestic intermodal customers in the second quarter  of
1996.    This  decrease  was  offset  by  increased  stacktrain
volumes.   Land transportation expenses decreased in the  first
three  quarters  of  1997  as compared  with  the  first  three
quarters   of  1996  primarily  due  to  the  volume  decreases
resulting from such sale of servicing rights.

Ocean Transportation

     Ocean  transportation  expenses  increased  in  the  third
quarter  and  first  three quarters of 1997 compared  with  the
third  quarter and first three quarters of 1996 as a result  of
increased  purchases of vessel space by the  company  from  its
joint  operation  with  TMM in the Asia-Mexico  trade  and  its
alliance partners in the Asia-Latin America service, additional
feeder  costs  in  Asia due to slot purchase  arrangements  and
additional   vessel  charters,  and  lower   subsidy   payments
resulting  from operating fewer vessels in 1997 and prior  year
subsidy  adjustments.   Partially  offsetting  these  increased
expenses  were reductions in costs resulting from the operation
of  fewer  vessels in 1997 due to the sale of  five  U.S.  flag
vessels  and  the  return of five chartered U.S.  flag  vessels
during 1996.

Transportation Equipment

     Transportation  equipment costs  increased  in  the  third
quarter  and  first  three quarters of 1997 compared  with  the
third quarter and first three quarters of 1996 due to increased
container  lease  costs resulting from increased  volumes,  and
maintenance costs.

Cargo Handling

     Cargo handling expenses increased in the third quarter and
first three quarters of 1997 compared with the same periods  in
1996, as a result of higher cargo volumes from both the company
and  its alliance partners, primarily in the intra-Asia,  Latin
America  and North America-Asia markets, and from higher  labor
rates.    These   increases  were  partially  offset   by   the
strengthening value of the U.S. dollar against the Japanese yen
in  the third quarter and first three quarters of 1997 compared
to the dollar-yen exchange ratios in the same periods in 1996.

<PAGE>

Sales, General and Administrative

     Sales,  general and administrative expenses  increased  in
the  third  quarter of 1997 compared with the same period  last
year,   because   of  the  elimination  of  rail  reimbursement
programs,  offset  by  salary  and  benefit  savings  from  the
company's   1995  restructuring  which  resulted  in   position
reductions  during  1996.   Sales, general  and  administrative
expenses decreased in the first three quarters of 1997 compared
with  the first three quarters of 1996, as the company realized
salary and benefit savings from its 1995 restructuring.   Other
factors   which   reduced  sales,  general  and  administrative
expenses  for the 1997 periods were lower accruals for  certain
employee   benefit  costs  due  to  workforce  reductions   and
favorable insurance claims experience.

Other Income and Expense

     In the third quarter of 1997 the company recognized a gain
of  $16.2 million from the sale of lease receivables related to
five  barges, and an additional gain of $2.0 million  from  the
favorable settlement of claims related to the 1994 collision of
a  vessel  and  incurred costs of $2.7 million related  to  the
proposed  merger with NOL.  In the second quarter of 1997,  the
company  recognized a gain of $5.3 million  from  the  sale  of
chassis,  recorded  a gain of $1.5 million from  the  favorable
settlement  of  claims related to the 1995 Kobe earthquake  and
incurred  $2.7 million in costs related to the proposed  merger
with  NOL.   In  addition, in the first quarter  of  1997,  the
company recorded $3.0 million from the favorable settlement  of
claims related to the 1994 collision of a vessel.  In the third
quarter  of 1996 the company recognized a gain of $12.9 million
resulting  from the curtailment of obligations for pension  and
postretirement benefits due to workforce reductions.  Also,  in
the  second  quarter  and first quarter of  1996,  the  company
recognized gains of $6.9 million from the sale of the companyOs
rights  to  service certain domestic intermodal  customers  and
$1.6 million from the sale of a vessel to Matson, respectively.

Net Interest Expense

     Net interest expense decreased from $8.0 million and $27.6
million in the third quarter and first three quarters of  1996,
respectively, to $7.2 million and $23.7 million  in  the  third
quarter  and  first three quarters of 1997, respectively.   The
decrease  was  primarily due to the repayment of the  remaining
balance of the C10-class Series I Vessel Mortgage Bonds in  the
first  quarter of 1997, reductions in the balance of  the  C11-
class  Vessel  Mortgage Notes and higher  interest  capitalized
under  terminal construction contracts compared with  the  same
periods in 1996.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Summary of Financial Resources
(In millions)                   September 19      December 27
As of:                                  1997             1996
_________________________________________________________________
 Cash, Cash Equivalents and
  Short-term Investments            $  357.0          $  283.0
 Working Capital                       267.6             225.9
 Total Assets                        1,901.6           1,880.2
 Long-Term Debt and Capital
  Lease Obligations (1)                681.6             706.2
_________________________________________________________________

                                September 19     September 20
For the 38 weeks ending:                1997             1996
_________________________________________________________________
 Cash Provided by Operations         $  95.5          $  115.5
_________________________________________________________________
Investing Activities
 Proceeds from Sales of
 Property and Equipment              $  89.2          $  161.7
 Proceeds from Sale of
 Lease Receivables                      41.5
 Proceeds from Sale of
 Distribution Services                                     2.0

 Capital Expenditures
 Ships                               $   2.5          $   69.5
 Containers, Chassis and Rail Cars      88.5              20.3
 Leasehold Improvements and Other       16.8              13.0
_________________________________________________________________
  Total Net Capital Expenditures     $ 107.8          $  102.8
_________________________________________________________________
Financing Activities
  Repurchase of Common Stock                          $  (14.8)
  Borrowings                                              62.2
  Repayment of Debt and
   Capital Leases                    $  (24.8)           (43.0)
  Dividend Payments                     (7.4)             (7.7)
_________________________________________________________________
_________________________________________________________________
(1)Includes current and long-term portions.

Cash Flows

     During  the third quarter of 1997, the company sold  lease
receivables  related to five barges for $41.5 million  in  cash
and  repaid  existing deposits related to the barges  of  $12.3
million.
     
     In  connection with its new terminal in Los  Angeles,  the
company  entered into an agreement to purchase new cranes  and,
in  April  1997,  reached an agreement with a  group  of  banks
pursuant to which the company assigned its rights to the cranes
to  the  banks, and the banks leased the cranes to the company,
subject  to  certain  terms and conditions  on  a  year-to-year
basis.   Under the agreement, the company made all payments  to
the  crane manufacturer and was subsequently reimbursed by  the
banks.   The  payments and receipts have been included  in  the
Consolidated  Statement of Cash Flows as  Capital  Expenditures
and   Proceeds  from  the  Sales  of  Property  and  Equipment,
respectively.   The cost of the cranes included  in  the  lease
transaction is approximately $81.5 million.  Under the terms of
its  agreement, the company has annual options to either  renew
the  lease, purchase the cranes or arrange for the sale of  the
cranes  to  a  third party.  As part of the  sale  option,  the
company has guaranteed the lessors a minimum estimated value of
$58.9  million  at September 19, 1997 which will  decline  over
time.
     
     In the first quarter of 1996, the company sold Matson five
U.S.  flag  ships  (three  C9-class vessels  and  two  C8-class
vessels)  and  certain of its assets in Guam for  approximately
$158 million in cash.

<PAGE>

Capital Spending

     Capital expenditures of $107.8 million in the first  three
quarters  of  1997  were  primarily for  purchases  of  cranes,
containers,  and terminal and leasehold improvements.   Capital
expenditures  in  1997,  including  expenditures  for  the  Los
Angeles  and Kaohsiung cranes, are expected to be approximately
$125  million;  the  remaining non-crane expenditures  will  be
primarily for terminal and leasehold improvements.  The company
has  outstanding  purchase commitments to  acquire  facilities,
equipment and services totaling $24.2 million.  In addition  to
vessel  expenditures of $69.5 million, the company made capital
expenditures  in  the first three quarters  of  1996  of  $33.3
million  primarily  for purchases of chassis,  containers,  and
terminal and leasehold improvements.
     
     In  January 1996, the company took delivery of  the  sixth
and final C11-class vessel, five of which were delivered during
1995.   The  total cost of the six C11-class vessels  was  $529
million,  including  total payments to the  shipyards  of  $503
million,  of  which $62 million was paid in January  1996.   To
finance  a  portion  of  these vessel  purchases,  the  company
borrowed  $402  million.   Of this amount,  $62.2  million  was
borrowed  in  January  1996 and the  remainder  in  1995.   The
company has entered into four interest rate swap agreements  to
exchange the variable interest rates on certain vessel mortgage
notes  for  fixed rates over initial periods ranging between  7
and  12 years.  This debt is more fully described in Note 4  of
Notes to Consolidated Financial Statements.

Share Repurchases

     In  April 1996, the Board of Directors approved a  program
to  repurchase  up  to  an aggregate  of  $50  million  of  the
company's common stock from time to time through open-market or
privately  negotiated transactions.  In the  third  and  fourth
quarters  of  1996, the company paid $29 million to  repurchase
approximately 1.3 million shares of its common stock under this
program.   No  shares were repurchased during the  first  three
quarters of 1997.

Capital Resources

     The  company has a credit agreement with a group of  banks
which  provides  for an aggregate commitment  of  $200  million
through March 1999.  Under that agreement, the company also has
an option to sell up to $150 million of certain of its accounts
receivable to the banks as an alternative to borrowing.   There
have been no borrowings under this agreement.
     
     Consummation of the Proposed Merger with NOL may result in
the  termination  of  the company's credit  agreement  and  its
option under that agreement to sell accounts receivable.
     
     The  company believes its existing resources,  cash  flows
from  operations  and  current  borrowing  capacity  under  its
existing  credit  facilities  will  be  adequate  to  meet  its
liquidity needs for the foreseeable future.


CERTAIN FACTORS THAT MAY AFFECT OPERATING RESULTS

     Statements   prefaced   with   "expects",   "anticipates",
"estimates", "believes" and similar words, including statements
concerning   anticipated  rate  and  volume  trends,   alliance
participation, regulatory approvals and capital  spending,  are
forward-looking  statements  based  on  the  company's  current
expectations  as  to  prospective  events,  circumstances   and
conditions over which it may have little or no control  and  as
to  which  it  can  give  no assurances.   All  forward-looking
statements,  by  their nature, involve risks and uncertainties,
including  those  discussed above and below, that  could  cause
actual results to differ materially from those projected.

<PAGE>

     The  company  expects  that it and the  shipping  industry
generally  will  face challenging conditions in  coming  years.
The  adversity of the operating environment and its  impact  on
the  company's operating results will depend on  a  variety  of
factors,  including:  the timing and extent of  an  anticipated
slowing  of  market  growth in certain markets  served  by  the
company;  the  amount and timing of an anticipated  significant
increase  in industry capacity due to new vessel deliveries  to
competing carriers; rate reductions in some market segments due
to  this  additional  capacity and  other  factors;  successful
implementation  and  continuation of the  company's  alliances,
which  comprise a significant factor in the company's long-term
strategy  to  remain competitive; and the pace  and  degree  of
industry deregulation.

     As  a result of capacity increases exceeding market growth
and increased competition, considerable rate instability exists
in  most  of  the company's major markets.  Destabilization  of
rates  has  in  the past had and, if extensive,  could  in  the
future  have  a  material  adverse impact  on  the  results  of
operations of carriers in these trades, including the company.
     
     Demand in the trans-Pacific market is dependent on factors
such  as the quantity of available import and export cargo  and
economic  conditions  in  the  U.S.  and  other  Pacific  Basin
countries.   The  degree to which any growth or contraction  in
the  trans-Pacific market impacts the company  will  depend  in
large  part on the introduction of additional vessels into  the
market  by  the  company's competitors.  Because  a  number  of
competing   ocean   carriers  have  placed   orders   for   the
construction  of a significant number of new vessels,  capacity
in  the  trans-Pacific market is expected to grow significantly
more   than   demand,  which  could  result  in  further   rate
reductions.

     Other  risks and uncertainties include: growth  trends  in
other  markets served by the company, the company's ability  to
respond  to  those  trends, changes in the cost  of  fuel,  the
status  of labor relations, the amplitude of recurring seasonal
business  fluctuations, and the continuation and  effectiveness
of  the  Trans-Pacific Stabilization Agreement and the  various
shipping conferences to which the company belongs.

     Also,  the  company  is  subject  to  inherent  risks   of
conducting  business  internationally,  including  changes  in:
legislative or regulatory requirements, the relative values  of
the  U.S. dollar and the various foreign currencies with  which
the company is paid and funds its local operations, tariffs and
other  trade barriers and restrictions affecting its customers,
payment   cycles,   the   difficulty  of  collecting   accounts
receivable, taxes, and the burdens of complying with a  variety
of   foreign   laws.   In  connection  with  its  international
operations, the company is also subject to general geopolitical
risks,  such as political and economic instability and  changes
in  diplomatic and trade relationships affecting the company or
its customers.

     The   company's  Proposed  Merger  with   NOL   may   have
significant   effects  on  the  company's  future   operations,
although the nature and extent of such effects cannot currently
be  determined.  The Proposed Merger is also subject to  review
by  the  Secretary of Transportation of approvals by  MarAd  of
certain  agreements and transfers.  No assurances can be  given
that  the Secretary will approve MarAd's decisions or that  the
Proposed Merger will be consummated.  If the Proposed Merger is
not  consummated the company would again consider  alternatives
to  increase shareholder value, which alternatives may  include
continued  operations as an independent company with  increased
focus on its terminal, intermodal and logistics operations  and
possible  corporate restructurings to take  advantage  of  more
competitive  tax  structures, the  sale  of  certain  lines  of
business or assets of the company, a spin-off of one or more of
the   business  divisions  of  the  company  and  a   leveraged
recapitalization  of the capital stock of  the  company  (or  a
combination of the foregoing), as well as a sale or  merger  of
the company.

     The   company   expressly  disclaims  any  obligation   or
undertaking to update any forward-looking statements  contained
herein in the event of any change in the company's expectations
with  regard  thereto or with regard to current or  prospective
conditions  or  circumstances on which any  such  statement  is
based.

<PAGE>

PART II - OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

     The   company   is  a  party  to  various  pending   legal
proceedings,  claims and assessments arising in the  course  of
its  business activities, including actions relating  to  trade
practices, personal injury or property damage, alleged breaches
of  contracts, torts, labor matters, employment practices,  tax
matters  and  miscellaneous  other  matters.   Some  of   these
proceedings involve claims for punitive damages, in addition to
other specific relief.

     Among  these actions are approximately 3,800 cases pending
against  the company, together with numerous other ship  owners
and  equipment manufacturers, involving injuries  or  illnesses
allegedly  caused  by  exposure  to  asbestos  or  other  toxic
substances on ships.  In May 1996, an order was entered in  the
United  States  District  Court for  the  Eastern  District  of
Pennsylvania,  which administratively dismissed  most  of  such
cases  without  prejudice and with all statutes  of  limitation
tolled,  and  with reinstatement permitted upon fulfillment  by
plaintiffs of certain specified conditions.  In July 1996,  the
Court  issued  an  order to reinstate 29 cases  against  vessel
owners and to dismiss the vessel owners' third party claims and
cross-claims  against manufacturers of asbestos  products.   On
June  25,  1997, the Court issued a clarifying order permitting
vessel  owners  to  add  third party  claims  against  specific
manufacturers.   In  discussion with shipowners'  counsel,  the
Court  expanded  its  intention to allow the  reinstatement  of
cross-claims  and  third party claims  already  asserted.   The
company  is  presently  unable  to  ascertain  or  predict  the
potential  impact of this order on the disposition or  eventual
outcome of such cases.

     The  company  insures its potential liability  for  bodily
injury   to   seamen  through  mutual  insurance  associations.
Industry-wide   resolution  of  asbestos-related   claims   and
resolutions  of claims against bankrupt shipping  companies  at
higher   than  expected  amounts  could  result  in  additional
contributions  to those associations by the company  and  other
association members.

     In December 1989, the government of Guam filed a complaint
with  the  Federal  Maritime Commission ("FMC")  alleging  that
American President Lines, Ltd. and an unrelated company charged
excessive  rates for carrying cargo between the U.S. and  Guam,
in  violation of the Shipping Act and the Intercoastal Shipping
Act of 1933, and seeking an undetermined amount of reparations.
Three   private   shippers  are  also  complainants   in   this
proceeding.  On June 3, 1996, the FMC administrative law  judge
ordered  that  the complaint be dismissed on the  merits.   The
complainants  filed its appeal with the FMC on July  25,  1996,
and American President Lines, Ltd. filed its reply on September
16, 1996.  A decision by the FMC is expected in December 1997.

     The   company  and  its  directors  have  been  named   as
defendants in a purported class action on behalf of all  public
stockholders  of the company pending in the Superior  Court  of
the  State  of California for the County of Alameda,  captioned
Soshtain  et.  al. v. Arledge et. al., Case No. 781838-3.   The
complaint  was  filed on April 18, 1997 and  alleges  that  the
company's   directors  breached  their  fiduciary   duties   in
connection with the Proposed Merger with NOL by failing to take
all  necessary steps to ensure that the company's  stockholders
would  receive  the maximum value realizable for their  shares,
and  seeks  damages  in  an unspecified  amount  and  equitable
relief,  including  an injunction against consummation  of  the
Proposed  Merger.   The defendants filed their  answer  to  the
complaint,  generally denying the allegations,  on  August  15,
1997.   The  case  is  in early stages of  discovery,  and  the
company believes the claims are without merit.

     Based  upon information presently available, and in  light
of  legal  and other defenses and insurance coverage and  other
potential   sources  of  payment  available  to  the   company,
management  does  not  expect the legal proceedings  described,
individually  or  in the aggregate, to have a material  adverse
impact  on  the  company's consolidated financial  position  or
operations.

<PAGE>

Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      The annual meeting of stockholders was held on August 28,
1997  in  Oakland,  California.   The  election  of  directors,
approval  and  adoption of the merger agreement  with  NOL  and
transactions   contemplated  thereby,   and   ratification   of
auditors,  were submitted to the stockholders, as described  in
the  company's  Proxy Statement dated July 21, 1997,  and  were
voted  upon  and approved by the stockholders at  the  meeting.
The  following  table describes the results of the  stockholder
votes:

                           Votes    Votes  Withheld     Broker
                            For    Against  /Abstain  Non-Votes
________________________________________________________________

Election of Directors:

Charles S. Arledge       21,854,667          123,653

F. Warren Hellman        21,850,256          128,064

Timothy J. Rhein         21,837,078          141,242

Forrest N. Shumway       21,849,110          129,210

Barry L. Williams        21,854,516          123,804

Approval  and  adoption
of the Merger agreement
and   the  transactions
contemplated
thereby, including  the
 Merger                  18,699,356 117,627   47,723  3,113,614

Ratification of Auditors 21,858,773  84,684   34,863

     At the meeting, 21,978,320 shares of common stock (each of
which  was  entitled to one vote) were present and represented,
constituting 88.6% of the outstanding shares of common stock on
the record date of July 10, 1997.


Item 6.EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits required by Item 601 of Regulation S-K

     The following documents are exhibits to this Form 10-Q:

Exhibit
 No.               Description of Document
_______            _______________________

10.1 Amended and restated Retirement Account Plan as of June 1,
     1997.

27   Financial  Data  Schedules  filed  under  Article   5   of
     Regulation  S-X for the third quarter ended September  19,
     1997.

(b)  Reports on Form 8-K

     On  July 18, 1997, the company filed a Form 8-K dated July
     17,  1997,  relating to the company's Press Release  dated
     July  17,  1997,  which announced the company's  financial
     results for the second quarter of 1997.

     On  July 18, 1997, the company filed a Form 8-K dated July
     17,  1997,  relating to the company's Press Release  dated
     July  17,  1997,  which  announced that  the  company  had
     successfully   concluded  negotiations   for   new   labor
     agreements   with   the   Marine   Engineers'   Beneficial
     Association,  District No. 1 - Pacific Coast District  and
     with the American Radio Association.

<PAGE>

                  APL Limited and Subsidiaries





                           SIGNATURES



      Pursuant  to the requirements of the Securities  Exchange
Act  of 1934, the registrant has duly caused this report to  be
signed  on  its  behalf  by  the  undersigned,  thereunto  duly
authorized.

                                                     APL LIMITED




Dated:   October  24,  1997      By  /s/   William   J. Stuebgen
___________________________          ___________________________
                                           William   J. Stuebgen
                                               Vice President,
                                               Controller and
                                        Chief Accounting Officer