______________________________________________________________________________
______________________________________________________________________________



               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 20, 1996
                               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 18, 1996
____________________________   _______________________________

Common Stock, $.01 par value                   25,022,140


______________________________________________________________________________
______________________________________________________________________________
<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 12-21


       Part II.  OTHER INFORMATION
                 _________________

Item 1. Legal Proceedings                                   22

Item 6. Exhibits and Reports on Form  8-K                   23

        SIGNATURES                                          24

<PAGE>
APL Limited and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME (Unaudited)
______________________________________________________________________________
(In thousands, except             Quarter Ended       Three Quarters Ended
  per share amounts) September 20  September 22  September 20  September22
                             1996          1995          1996         1995
______________________________________________________________________________
REVENUES                 $646,123      $711,148    $2,013,515   $2,126,099
______________________________________________________________________________

EXPENSES                  597,305       657,601     1,904,573    2,044,298
______________________________________________________________________________
OPERATING INCOME           48,818        53,547       108,942       81,801

OTHER INCOME (EXPENSE)
Interest Income             6,468         4,735        19,466       16,232
Interest Expense          (14,483)       (8,457)      (47,043)     (23,498)
______________________________________________________________________________
Income Before Taxes        40,803        49,825        81,365       74,535
Federal, State and
  Foreign Tax Expense      12,659        18,933        28,478       28,323
______________________________________________________________________________
NET INCOME                $28,144      $ 30,892    $   52,887    $  46,212
______________________________________________________________________________
Less Dividends on Preferred Stock                                    3,375
NET INCOME APPLICABLE TO
  COMMON STOCK            $28,144      $ 30,892    $   52,887    $  42,837
______________________________________________________________________________
______________________________________________________________________________

EARNINGS PER COMMON SHARE
______________________________________________________________________________
  Primary                   $1.07        $1.02          $2.01        $1.49
  Fully Diluted             $1.07        $0.97          $2.01        $1.42
______________________________________________________________________________

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 20December 29
                                                1996       1995
______________________________________________________________________________
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents                  $ 130,635   $ 76,564
Short-Term Investments                       177,868     59,086
Trade and Other Receivables, Net             242,484    245,490
Fuel and Operating Supplies                   30,474     40,358
Prepaid Expenses and Other Current Assets     66,696     80,840
______________________________________________________________________________
Total Current Assets                         648,157    502,338
______________________________________________________________________________
PROPERTY AND EQUIPMENT
Ships                                        905,899  1,091,991
Containers, Chassis and Rail Cars            789,076    801,274
Leasehold Improvements and Other             287,477    284,850
Construction in Progress                      13,061     25,333
______________________________________________________________________________
                                           1,995,513  2,203,448
Accumulated Depreciation and Amortization  (864,519)  (961,971)
______________________________________________________________________________
Property and Equipment, Net                1,130,994  1,241,477
______________________________________________________________________________
INVESTMENTS AND OTHER ASSETS                 147,806    134,968
______________________________________________________________________________

Total Assets                               $1,926,957  $1,878,783
______________________________________________________________________________
______________________________________________________________________________


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term Debt
  and Capital Leases                        $  9,983   $ 11,810
Accounts Payable and Accrued Liabilities     427,612    425,378
______________________________________________________________________________
Total Current Liabilities                    437,595    437,188
______________________________________________________________________________
DEFERRED INCOME TAXES                        161,072    157,480
______________________________________________________________________________
OTHER LIABILITIES                            118,111    127,858
______________________________________________________________________________
LONG-TERM DEBT                               707,439    685,954
CAPITAL LEASE OBLIGATIONS                        886      1,133
______________________________________________________________________________
Total Long-Term Debt and
 Capital Lease Obligations                   708,325    687,087
______________________________________________________________________________
COMMITMENTS AND CONTINGENCIES
______________________________________________________________________________
STOCKHOLDERS' EQUITY
Common Stock $.01 Par Value, Stated at $1.00
  Authorized-60,000,000 Shares
  Shares Issued and Outstanding-
  25,170,000 in 1996 and 25,669,000 in 1995   25,170     25,669
Additional Paid-In Capital                                1,943
Retained Earnings                            476,684    441,558
______________________________________________________________________________
Total Stockholders' Equity                   501,854    469,170
______________________________________________________________________________

Total Liabilities and
 Stockholders' Equity                     $1,926,957 $1,878,783
______________________________________________________________________________
______________________________________________________________________________

See notes to consolidated financial statements.
<PAGE>
APL Limited and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
______________________________________________________________________________
(In thousands)                             Three Quarters Ended
                                       September 20September 22
                                               1996        1995
______________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                 $ 52,887     $46,212
Adjustments to Reconcile Net Income to Net
 Cash Provided by Operating Activities:
  Depreciation and Amortization              83,466      79,022
  Deferred Income Taxes                      12,094       6,847
  Change in Receivables                       5,006    (28,883)
  Change in Fuel and Operating Supplies       6,311     (4,846)
  Change in Prepaid Expenses and
   Other Current Assets                       1,126     (3,543)
  Gain on Sale of Property and Equipment    (2,364)     (3,281)
  Gain on Sale of Distribution Services     (6,900)
  Change in Accounts Payable
   and Accrued Liabilities                  17,163      30,972
  Change in Restructuring Charge Liability (17,629)
  Gain on Curtailment of Pension and
   Postretirement Benefits                 (12,934)
  Other                                    (22,772)      16,580
______________________________________________________________________________
   Net Cash Provided by
    Operating Activities                   115,454      139,080
______________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures                      (102,776)   (238,393)
Proceeds from Sales of
 Property and Equipment                    161,728      39,203
Proceeds from Sale of Distribution Services  2,000
Purchase of Short-Term Investments        (407,725)    (40,889)
Proceeds from Sales of
 Short-Term Investments                    288,943     250,366
Other                                       (1,546)     (1,959)
______________________________________________________________________________
   Net Cash Provided by (Used in)
     Investing Activities                  (59,376)       8,328
______________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of Common Stock                 (14,755)   (139,622)
Issuance of Debt                             62,215     143,670
Repayments of Debt                         (31,342)    (19,955)
Repayments of Capital Lease Obligations    (11,604)     (2,956)
Dividends Paid                              (7,713)    (11,793)
Debt Issue Costs                            (1,624)
Other                                         2,265       4,369
______________________________________________________________________________
   Net Cash Used in Financing Activities    (2,558)    (26,287)
______________________________________________________________________________
Effect of Exchange Rate Changes on Cash         551       (550)
______________________________________________________________________________
   NET INCREASE IN CASH AND CASH EQUIVALENTS 54,071     120,571
______________________________________________________________________________
Cash and Cash Equivalents at
 Beginning of Period                         76,564      39,754
______________________________________________________________________________
Cash and Cash Equivalents at End of Period $130,635     $160,325
______________________________________________________________________________
______________________________________________________________________________

SUPPLEMENTAL DATA:
______________________________________________________________________________
CASH PAID FOR:
Interest, Net of Capitalized Interest      $ 45,073     $22,892
Income Taxes, Net of Refunds               $ 17,671     $17,823
______________________________________________________________________________
NONCASH INVESTING ACTIVITIES:
Notes Receivable from the Sale of
  Distribution Services                    $  6,000
Change in Trade Receivables Invested
  in the Capital Construction Fund                      $25,652
______________________________________________________________________________
NONCASH FINANCING ACTIVITIES:
Conversion of Redeemable Preferred Stock                $75,000
______________________________________________________________________________

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 29, 1995 (Commission File  No.  1-
8544).

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 1996 is 35%, which  was
reduced  in the third quarter to reflect additional tax credits
expected  to  become  available  this  year.   The  full   year
effective tax rate for 1995 was 43%, which was adjusted in  the
fourth  quarter  from  38% to reflect the increased  effect  of
nondeductible  items on annual income after the fourth  quarter
restructuring charge.

Reclassifications

      Certain  1995 amounts have been reclassified  to  conform
with the 1996 presentation.


Note 2.   United States Maritime Agreements

Operating-Differential Subsidy Agreement

       Amounts   recorded   under  the   company's   Operating-
Differential  Subsidy ("ODS") agreement with the United  States
Maritime Administration ("MarAd") were $10.7 million and  $13.6
million for the quarters ended September 20, 1996 and September
22, 1995, respectively, and $36.1 million and $44.1 million for
the  three quarters ended September 20, 1996 and September  22,
1995,  respectively, and have been included as a  reduction  of
expenses.  The reduction in subsidy in 1996 reflects  the  sale
by  the  company of six U.S.-flag vessels to Matson  Navigation
Company, Inc. ("Matson") in December 1995 and January  1996  as
discussed in Note 7.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 3.Accounts Payable and Accrued Liabilities

      Accounts payable and accrued liabilities at September 20,
1996 and December 29, 1995, were as follows:
______________________________________________________________________________
(In thousands)                         September 20 December 29
                                               1996        1995
______________________________________________________________________________
Accounts Payable                           $ 54,297     $58,144
Accrued Liabilities                         271,491     243,228
Current Portion of Insurance Claims          15,892      19,564
Income Taxes Payable                          4,242       5,855
Unearned Revenue                             60,454      59,722
Restructuring Charge                         21,236      38,865
______________________________________________________________________________
Total Accounts Payable and
 Accrued Liabilities                      $427,612     $425,378
______________________________________________________________________________
______________________________________________________________________________

     In the fourth quarter of 1995, the company recorded a one-
time  charge  of  $48.4  million  related  to  the  accelerated
completion   of   its   reengineering   program    and    other
organizational changes.  As of September 20, 1996, a  total  of
$20.3  million  in  severance payments have  been  made,  $15.5
million of which were made in the first three quarters of 1996.
In   addition,   $6.7  million  in  equipment   and   leasehold
improvements  have  been  written off for  closed  offices  and
projects eliminated, $2.1 million of which was written  off  in
the first three quarters of 1996.


Note 4.   Long-Term Debt

     Long-Term Debt at September 20, 1996 and December 29, 1995
consisted of the following:
______________________________________________________________________________
(In thousands)                         September 20 December 29
                                               1996        1995
______________________________________________________________________________
Vessel Mortgage Note Due Through 2008 (1)  $388,064     $338,044
8% Senior Debentures $150 million Face Amount
 Due on January 15, 2024 (2)                147,189     147,169
7 1/8% Senior Notes $150 million Face Amount
 Due on November 15, 2003 (2)               148,352     148,227
Series I 8% Vessel Mortgage Bonds
  Due Through 1997(3)                        14,294      33,353
8% Refunding Revenue Bonds
 Due on November 1, 2009                     12,000      12,000
Other                                         7,070       7,161
______________________________________________________________________________
Total Debt                                  716,969     685,954
Current Portion                               9,530
______________________________________________________________________________
Total Long-Term Debt                       $707,439     $685,954
______________________________________________________________________________
______________________________________________________________________________

(1)  The company has taken delivery of six new C11-class vessels.
   To finance a portion of the purchase price of these vessels, the
   company borrowed approximately $339.9 million in 1995 and $62.2
   million  in 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
   $266.8  million  at  September 20,  1996,  to  exchange  the
   variable  interest rate obligations on such notes for  fixed
   rate obligations for periods ranging between 7 and 12 years.
   The  current variable interest rates for all of  the  vessel
   mortgage notes range between 6.465% and 6.81%.  As a  result
   of  the  swaps,  the effective interest rates range  between
   6.625%  and 7.461% for the first five years after inception,
   and  6.625% and 7.586% for the remaining terms of the swaps.
   Net  payments or receipts under the agreements are  included
   in interest expense.

(2)The  Senior Notes had an effective interest rate of  7.325%,
   and an unamortized discount of $1.6 million and $1.8 million
   at  September  20, 1996 and December 29, 1995, respectively.
   The  Senior  Debentures had an effective  interest  rate  of
   8.172%,  and  an  unamortized discount of  $2.8  million  at
   September 20, 1996 and December 29, 1995.  Interest payments
   are due semiannually.

(3)Principal payments on each of the company's Series I  Vessel
   Mortgage  Bonds are due in equal semiannual installments  of
   $2.4 million.  The company has the option to issue Series II
   Bonds due sequentially in semiannual payments at the end  of
   the  term of the Series I Bonds in lieu of up to two of  the
   remaining  cash  payments, which it has not  yet  exercised.
   Principal amounts are classified as long-term debt when  the
   company's  ability to issue Series II Bonds in lieu  of  the
   remaining semiannual cash payments extends beyond one  year.
   The   bonds   issued   under   this   loan   agreement   are
   collateralized by the five C10-class vessels.

      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.


Note 5.   Employee Benefit Plans

      During  the third quarter of 1996, the company recognized
curtailment gains of $11.2 million and $1.7 million related  to
its  defined  benefit  pension plans and postretirement  health
care  plan,  respectively.  These gains resulted from  the  net
decreases   in  pension  and  postretirement  liabilities   for
employees who left the company in 1995 and 1996 as a result  of
its reengineering program.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 6.   Stockholders' Equity

Common Stock

      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.  As of September 20,  1996,
the  company had repurchased 627,100 shares of its common stock
under  this  program  through open market  transactions  at  an
average  price  of  $23.48  per  share,  plus  expenses.    All
repurchased  shares were retired.  The excess of  the  purchase
price  of  the  common  stock over its stated  value  has  been
reflected  as  a  decrease in Additional  Paid-In  Capital  and
Retained  Earnings  on  the accompanying  Consolidated  Balance
Sheet.

Earnings Per Common Share

      For  the third quarter and first three quarters of  1996,
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.  Primary earnings per share for the third  quarter
and  first three quarters of 1995 was computed by dividing  net
income, reduced by the amount of the preferred stock dividends,
by  the  weighted  average number of common shares  and  common
equivalent  shares  outstanding.  Fully  diluted  earnings  per
share  for the third quarter and first three quarters  of  1995
was  computed  based  upon the assumption  that  the  Series  C
Cumulative  Convertible Preferred Stock ("Series C Stock")  was
converted at the beginning of the period.  The number of shares
used in these computations were as follows:

_____________________________________________________________________________
Weighted Average Number of Common and Common Equivalent Shares
_____________________________________________________________________________
(In millions)                  Quarter Ended        Three Quarters Ended
                  September 20  September 22  September 20  September 22
                          1996          1995          1996          1995
_____________________________________________________________________________
Primary                   26.3          30.3          26.3          28.7
Fully Diluted             26.3          31.8          26.3          32.5
_____________________________________________________________________________
_____________________________________________________________________________

      Weighted  average shares for the third quarter and  first
three  quarters of 1996 reflect the repurchase of  six  million
shares  of the company's common stock in August through October
1995, and the repurchase of 627,100 shares in 1996 as described
above.

Supplementary Earnings Per Share Data

      In  July  1995,  the  Series C Stock was  converted  into
3,961,498 shares of common stock.  Had the Series C Stock  been
converted at the beginning of 1995, primary earnings per  share
for  the  third quarter and first three quarters of 1995  would
have  been  $0.98 and $1.45, respectively, compared with  $1.02
and  $1.49  as reported.  Fully diluted earnings per share  for
the  third  quarter and first three quarters of 1995 would  not
have  changed  from the reported amounts of  $0.97  and  $1.42,
respectively.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 6.   Stockholders' Equity (continued)

Stock Bonus Plan

      During  the  first  three quarters of 1996,  the  company
issued  6,253 shares of common stock and 13,697 phantom  shares
under the 1995 Stock Bonus Plan (the "Plan").  The Plan permits
certain executives and key employees to receive all or part  of
their  bonuses in the form of shares of common stock or phantom
shares.   In  addition,  non-employee directors  may  elect  to
receive  all  or part of their annual retainers and/or  meeting
fees  in  the form of shares of common stock or phantom shares.
Participants receive a premium in the form of additional shares
equal  to  17.6%  of the number of shares of  common  stock  or
phantom shares received, which vest over a two year period.


Note 7.   Commitments and Contingencies

Commitments

Alliances

      In  connection  with the sale of the company's  K10-class
vessel  construction  contract to a third  party  in  September
1995,  the  company,  Mitsui OSK Lines,  Ltd.  ("MOL"),  Orient
Overseas  Container  Line  ("OOCL")  and  Nedlloyd  Lines  B.V.
("NLL"), formed a joint venture company that agreed to  charter
back the K10 vessels for seven years, in which their respective
shares  are each 25%.  OOCL has agreed to subcharter  the  K10s
from  the  joint venture for seven years for use in  the  Asia-
Europe   trade,  replacing  three  of  its  2,800   twenty-foot
equivalent  unit  F-class vessels.  The three replaced  F-class
vessels are being chartered to the joint venture for ten  years
and subchartered by the company from the joint venture for four
years.   The  subcharters  for two of such  vessels  have  been
assumed  by  Transportacion Maritima  Mexicana  ("TMM")  for  a
period  of  three years.  TMMOs obligations under  the  assumed
subcharters  have been guaranteed by the company.  The  company
has  been deploying the third F-class vessel since May 1996  in
its West Asia/Middle East service.

      The  company and Matson commenced service under a 10-year
alliance  in  February 1996.  In connection with the  alliance,
the  company sold Matson six of its U.S.-flag ships (three  C9-
class  vessels and three C8-class vessels) and certain  of  its
assets  in Guam for approximately $163.4 million in cash.   One
of  the ships was sold in December 1995, and the remaining five
vessels  were  sold  in January 1996.  Four of  these  vessels,
together  with a fifth Matson vessel, are currently being  used
in  the alliance.  The net gain on the sale of the four vessels
used  in  the alliance and the assets in Guam, after  deducting
related costs, is estimated to be $1.9 million, depending  upon
final  vessel modification and drydock costs.  The net gain  on
the  sale will be deferred and amortized over the 10-year  term
of  the alliance.  The net gain on the sale of the fifth vessel
was  $1.6  million and was recognized in the first  quarter  of
1996.   Matson is operating the vessels in the alliance,  which
serves the U.S. West Coast, Hawaii, Guam, Korea and Japan,  and
has  the use of substantially all the westbound capacity.   The
company  has the use of substantially all the alliance vessels'
eastbound capacity.

<PAGE>

APL Limited and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 7.   Commitments and Contingencies (continued)

Commitments (continued)

Facilities, Equipment and Services

      The  company  had  outstanding  purchase  commitments  to
acquire  cranes,  facilities, equipment and  services  totaling
$99.3  million at September 20, 1996.  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 the actual services performed.  At September 20,
1996,  the  company had outstanding letters of credit  totaling
$29.1  million which guarantee the company's performance  under
certain of its commitments.

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
four  L9-class  vessels from Lykes, and  Lykes  operates  three
Pacesetter  vessels chartered from the company.  All  four  L9s
were  redelivered to Lykes by September 25, 1996, and the three
Pacesetters  continue to be operated by  Lykes.   On  July  26,
1996,  the  Bankruptcy  Court gave  its  final  approval  to  a
settlement agreement, which became effective on August 9, 1996,
between  the  company  and Lykes, establishing  terms  for  the
payment  of  the  company's  claims against  Lykes  for  unpaid
charter hire.  The settlement also allows Lykes the use of  the
three Pacesetters until December 31, 1997 and requires Lykes to
obtain  the  release of liens it permitted  to  be  established
against   those  vessels.   Certain  Bankruptcy  Court   orders
underlying the settlement agreement have been appealed.  LykesO
bankruptcy  filing is not expected to have a  material  adverse
impact  on  the  company's consolidated financial  position  or
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.   Sale of Domestic Distribution Services

      On  May  2, 1996, the company sold its rights to  service
certain  domestic  intermodal customers of APL  Land  Transport
Services,  Inc.  ("APLLTS"), a wholly owned subsidiary  of  the
company,  for $2.0 million in cash and $6.0 million  in  notes,
and  realized  a  pre-tax gain of $6.9 million.   In  addition,
APLLTS  and  the  purchaser entered into  a  10-year  agreement
whereby  APLLTS  will  provide  stacktrain  services   to   the
purchaser.   Revenues  related to  the  servicing  rights  sold
represented approximately 6% of the company's consolidated 1995
revenues.

<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 third quarter  and
first three quarters of 1996 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 29, 1995.

RESULTS OF OPERATIONS
                          Third Quarter        Year to Date

(In millions)           1996   1995 Change    1996    1995  Change
______________________________________________________________________________
Transportation Revenues
______________________________________________________________________________
 International          $510.0 $539.8 (6%)  $1,528.1 $1,562.2 (2%)
 North America           136.2  171.3 (20%)    485.5    563.9 (14%)
______________________________________________________________________________
Operating Income        $ 48.9 $ 53.5 (9%)  $  109.0 $   81.8  33%
______________________________________________________________________________
Pretax Income           $ 40.9 $ 49.8 (18%) $   81.4 $   74.5   9%
______________________________________________________________________________
______________________________________________________________________________

      Pretax  income  for  the third quarter  and  first  three
quarters   of  1996  was  $40.9  million  and  $81.4   million,
respectively, compared with pretax income of $49.8 million  and
$74.5 million in the third quarter and first three quarters  of
1995,  respectively.   During the third quarter  of  1996,  the
company  recorded  a gain of $12.9 million resulting  from  the
curtailment  of  obligations  for  pension  and  postretirement
benefits due to workforce reductions.  Also included in  pretax
income  for the first three quarters of 1996 was a $6.9 million
gain  from the sale of the companyOs rights to service  certain
domestic intermodal customers, and a $1.6 million gain from the
sale  of  a vessel.  In the third quarter of 1995, the  company
recognized gains of $3.6 million from the sale of a vessel  and
vessel  construction contracts, and $3.5 million in  liquidated
damages  from  the  delayed delivery of two C11-class  vessels.
Excluding these gains and liquidated damages, pretax income for
the  third  quarter and first three quarters of 1996 was  $28.0
million  and $60.0 million, respectively, compared  with  $42.7
million and $67.4 million for the same periods of 1995.

      After  excluding  the  gains and the  liquidated  damages
discussed  above, pretax income for the third quarter  of  1996
declined compared with the third quarter of 1995 primarily as a
result  of lower revenue per forty-foot-equivalent unit ("FEU")
in  the company's U.S. import market, lower volumes and average
revenue  per  FEU  in the company's U.S. export  market,  lower
average  revenue per FEU in the Asia-Europe market  and  higher
cargo handling costs.  Partially offsetting these factors  were
higher  volumes  in the company's U.S. import,  intra-Asia  and
Asia-Europe  markets  and  lower operating  and  administrative
expenses    compared   with   last   year's   third    quarter.
Additionally,  in  the  third  quarter  of  1996,  the  company
benefited  from  lower  accruals for certain  employee  benefit
costs,  favorable  insurance and other  claims  experience  and
subsidy adjustments.

     After  excluding  the  gains and  the  liquidated  damages
discussed above, pretax income for the first three quarters  of
1996  was  lower than the same period in 1995, as a  result  of
lower  revenue  per  FEU in the company's U.S.  import  market,
lower volumes and average revenue per FEU in the company's U.S.
export market, lower average revenue per FEU in the Asia-Europe
market,  higher  cargo handling costs and higher  net  interest
expense.   Partially  offsetting  these  factors  were   higher
volumes  in  the  company's U.S. import, intra-Asia  and  Asia-
Europe  markets, higher revenue per FEU in the company's intra-
Asia  market  and  lower operating and administrative  expenses
compared with last year's first three quarters.

<PAGE>
INTERNATIONAL TRANSPORTATION (1)
(Volumes in thousands of FEUs)
                         Third Quarter          Year to Date

                             1996   1995 Change    1996    1995 Change
______________________________________________________________________________
Import
 Volumes                      61.0   49.9   22%    156.2  148.9   5%
 Average Revenue per FEU    $3,413 $4,367  (22%)  $3,627 $4,242 (14%)
______________________________________________________________________________
Export
 Volumes                      31.7   40.0 (21%)    108.2  125.0 (13%)
 Average Revenue per FEU    $3,271 $3,553  (8%)   $3,227 $3,314  (3%)
______________________________________________________________________________
Intra-Asia
 Volumes                      42.8   39.9   7%    133.8  129.7    3%
 Average Revenue per FEU    $2,089 $2,060   1%   $2,153 $2,013    7%
______________________________________________________________________________
Asia-Europe
 Volumes                      10.1    6.9  47%     29.0   11.4 >100%
 Average Revenue per FEU    $2,076 $2,500 (17%)  $2,145 $2,478 (13%)
______________________________________________________________________________
______________________________________________________________________________
(1)Volumes  and  average revenue per FEU data  are  based  upon
   shipments originating during the period, which differs  from
   the   percentage-of-completion  method  used  for  financial
   reporting purposes.

      The company's U.S. import volumes increased significantly
in the third quarter of 1996 compared with the same period last
year primarily as a result of increases in commercial dry cargo
from  South  China, Hong Kong and Taiwan.  U.S. import  volumes
also  increased  in the first three quarters of  1996  compared
with  the  first  three quarters of 1995 due  to  increases  in
shipments of commercial dry cargo, primarily from South  China,
Hong  Kong and Japan.  Increases in military dry cargo  volumes
also contributed to higher volumes in the 1996 periods compared
with the 1995 periods.

      Volumes  of the company's U.S. export cargo decreased  in
the  third  quarter and first three quarters of  1996  compared
with  the  third quarter and first three quarters of  1995  due
primarily to reductions in shipments of commercial dry cargo to
the  People's  Republic of China, Hong Kong, Korea,  Japan  and
Taiwan  resulting from strong competition and  reduced  demand.
Refrigerated  cargo volumes also declined in the third  quarter
and  first  three quarters of 1996, compared with  last  year's
periods,  due to increased competition.  In addition, the  sale
by  the  company of six ships and its Guam business  to  Matson
contributed  to  lower volumes in the third quarter  and  first
three  quarters of 1996 compared with the same periods of 1995.
Earlier  in 1996, the company generally carried heavier  cargo,
which constrained utilization of available vessel capacity  and
also  contributed  to lower U.S. export volumes  in  the  first
three  quarters of 1996 compared with the first three  quarters
of 1995.

      Utilization  of  the company's share of  alliance  trans-
Pacific  containership capacity in the first three quarters  of
1996 was 77% and 80% for U.S. import and U.S. export shipments,
respectively, compared with 82% and 97%, respectively,  in  the
first three quarters of 1995.

      The  company's intra-Asia volumes increased in the  third
quarter and first three quarters of 1996 compared with the same
periods last year as shipments of both commercial dry cargo and
refrigerated  cargo  increased.  The increases  were  primarily
exports  from the People's Republic of China, Hong Kong,  India
and  Korea, partially offset by decreases in exports from Japan
and  Taiwan.  In addition, reduced shipments to and from  Kobe,
Japan  resulting  from  the January 1995  earthquake  adversely
affected the first three quarters of 1995.

     Volumes  in  the  company's Asia-Europe  market  increased
significantly in the third quarter and first three quarters  of
1996  from  the  same  periods last year.   The  company  began
shipping  cargo  from Asia to Europe in the  first  quarter  of
1995,  and from Europe to Asia in the second quarter  of  1995.
The increase in the company's volumes in the Asia-Europe market
in  the third quarter and first three quarters of 1996 compared
with the same

<PAGE>

periods   of  1995  is  attributable  to  increased   shipments
from  Hong Kong and the People's Republic of China to  Denmark,
the  United Kingdom and the Netherlands.  The increase  in  the
first  three  quarters of 1996 compared with  the  first  three
quarters  of  1995  is  also attributable  to  the  startup  of
operations.

      Average  revenue  per FEU for the company's  U.S.  import
shipments  decreased  in  the third  quarter  and  first  three
quarters  of  1996  compared with the third quarter  and  first
three  quarters of 1995 due to decreases in negotiated  service
contract  rates.   In late 1995, the company initiated  pricing
actions  for  specific commodities in specific trade  lanes  in
response to competitive conditions and loss of market share  in
its  U.S.  import  market.  Subsequently, competitors  and  the
company  have  further  lowered rates,  and  considerable  rate
instability  in  the  U.S. import market  continues  to  exist.
Destabilization of rates, if extensive, could have  a  material
adverse  impact  on  carriers  in  this  trade,  including  the
company.  The total U.S. import market continues to be affected
by   lower   overall  volumes,  excess  capacity   and   strong
competition.

      The  decline in average revenue per FEU in the  company's
U.S.  export  market  for  the third quarter  and  first  three
quarters of 1996 compared with the same periods of 1995 was due
to  lower rates for commercial dry cargo compared with the 1995
periods resulting from increased competition and reduced demand
in this market.

     Average revenue per FEU in the company's intra-Asia market
increased  slightly  in  the  third  quarter  and  first  three
quarters  of  1996  compared with the third quarter  and  first
three  quarters of 1995 due to a higher proportion  of  higher-
rated refrigerated and longer-distance shipments.  The increase
in  average  revenue per FEU in the intra-Asia  market  in  the
first three quarters of 1996 compared with the same period last
year  was also impacted by modest general rate increases  since
mid-1995.

      Average  revenue  per  FEU in the  company's  Asia-Europe
market  decreased in the third quarter and first three quarters
of  1996  as  compared  to the third quarter  and  first  three
quarters of 1995.  Eastbound service in the Asia-Europe market,
which  includes  lower-rated cargo than the westbound  service,
began  in the third quarter of 1995 and resulted in a reduction
in  average  revenue per FEU.  Additionally, rate deterioration
in   this   market   resulting  from  excess  vessel   capacity
contributed  to  lower average revenue  per  FEU  in  the  1996
periods compared with the 1995 periods.

     Other international transportation revenues, which include
cargo  handling, freight consolidation, logistics services  and
charter hire revenues, totaled $90.2 million and $263.7 million
in   third   quarter   and  first  three  quarters   of   1996,
respectively, compared with $81.3 million and $234.7 million in
the   third   quarter  and  first  three  quarters   of   1995,
respectively.   These  increases  primarily  reflect  increased
cargo  handling  revenues in Asia and North  America  resulting
from the company's alliances.

      The company experienced lower ocean freight revenues  and
incremental operating expenses during first half of 1995  as  a
result of the January 1995 earthquake in Kobe, Japan, in  which
the  ocean  terminal  leased  by the  company  was  extensively
damaged.   The  company  expects  substantially  all  of  these
expenses and lost revenues to be recovered through its business
interruption  insurance  and has submitted  its  claim  to  its
insurers.   Management  recorded  its  best  estimate  of   the
recovery  in  other  international transportation  revenues  in
1995.

      The  alliance agreements between the company, OOCL,  MOL,
NLL  and Malaysian International Shipping Corporation BHD  (the
"Global  Alliance") were fully implemented in the first quarter
of  1996.  On September 9, 1996, NLL announced its intention to
merge with the container line operations of The Peninsular  and
Oriental Steam Navigation Company ("P&O") by December 31, 1996.
NLL  and P&O are members of different alliances, and the future
alliance participation of the combined company has not yet been
determined.

<PAGE>

If  NLL  or the combined company do not continue in the  Global
Alliance,   there  could  be  a  significant  impact   on   its
operations.   However,  the  company believes  that  acceptable
alternatives  may  be  available.  The company  cannot  predict
whether  or  when the NLL-P&O combination will be completed  or
the  impact  its  alliance  participation  could  have  on  the
operations of the Global Alliance.

     The  alliance  between the company  and  Matson  was  also
implemented  in the first quarter of 1996.  In September  1996,
the  company and TMM amended their existing agreement  for  the
reciprocal  charter of vessel space.  The amended agreement  is
effective  until late April 1999 and automatically  renews  for
one year unless terminated with one year's notice.

      Under  the  company's  ODS agreement  with  MarAd,  which
expires  December  31,  1997,  payments  to  the  company  were
approximately  $36.1  million and $44.1 million  in  the  first
three quarters of 1996 and 1995, respectively.  As a result  of
the  sale  of  six  U.S.-flag vessels to  Matson,  the  company
expects  ODS payments in 1996 to be approximately $44  million,
compared with $61.5 million in 1995.

      On  October 8, 1996, H.R. 1350, the Maritime Security Act
of 1996, was signed into law.  This legislation provides for  a
10-year  Maritime  Security Program ("MSP")  with  up  to  $100
million in payments per annum which must be appropriated  on  a
annual  basis.   MSP will provide $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.   Due  to  the
enactment of MSP, the company's collective bargaining agreement
covering  its unlicensed personnel will expire on November  22,
1996.   Existing agreements covering licensed personnel  expire
in  December  1997  and  June  1998.   The  company  has  begun
negotiations  with both its licensed and unlicensed  unions  to
attempt  to achieve sufficient labor efficiencies to permit  it
to  enroll  vessels in the MSP.  MarAd has requested  that  MSP
enrollment applications be filed by November 7, 1996.   If  new
labor  agreements are not reached, labor disruptions that could
have  a  material  adverse impact on the  company's  operations
could result after expiration of the existing agreements.   The
company  is  not  able to predict whether it will  be  able  to
achieve  sufficient labor efficiencies through  the  collective
bargaining process to permit it to participate in MSP,  whether
labor  disruptions could occur, or whether its application  for
authority  to flag its vessels under foreign registry  will  be
granted  if  it is unable to reach agreement with  its  unions.
While  no  assurances can be given, management of  the  company
believes  that  it will be able to structure its operations  to
enable it to continue to operate on a competitive basis.

      In  April  1996, legislation was introduced in  the  U.S.
House  of  Representatives  and  the  U.S.  Senate  that  would
substantially modify the Shipping Act of 1984 ("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.   Although Congress failed to adopt this legislation,
it  will  most likely be reintroduced in 1997.  The legislation
proposed  in  1996 contained provisions that  would  have  been
phased  in, and would have eliminated government tariff filing,
allowed confidential and independent contracts between shippers
and  ocean  carriers,  strengthened  provisions  that  prohibit
predatory   activities  by  foreign  carriers,  and  prescribed
certain oversight responsibilities within the government  while
continuing  the  company's existing  antitrust  immunity.   The
company  is  unable to predict whether this or  other  proposed
legislation will be introduced or enacted, and whether it  will
contain terms similar to those proposed in 1996.  Enactment  of
legislation  modifying  the Shipping Act,  depending  upon  its
terms,  could have a material adverse impact on the competitive
environment in which the company operates and on the  company's
results of operations.

<PAGE>

      For  the remainder of 1996, the company currently expects
excess  vessel capacity and rate volatility in the U.S.  import
and  Asia-Europe markets.  Additionally, the company  currently
expects  lower  U.S.  export volumes and rates  than  in  1995,
reflecting weak demand, strong competition and the sale of  the
Guam   business.   The  company  currently  expects   continued
strength  in its intra-Asia market.  The extent to which  these
conditions materialize depends upon developments such  as,  but
not  limited  to,  changes  in  market  growth  rates,  general
economic  and political conditions in the markets  served,  the
amount  and  timing  of  continuing  significant  increases  in
industry  capacity,  the  extent  of  rate  reductions  in  the
companyOs  markets, successful continuation  of  the  company's
alliances,  whether  sufficient  labor  efficiencies   can   be
achieved, and the timing and extent of industry deregulation.

NORTH AMERICA TRANSPORTATION (1)
(Volumes in thousands of FEUs)
                         Third Quarter          Year to Date

                        1996    1995  Change     1996    1995 Change
______________________________________________________________________________
Revenues (2) (In millions)
 Stacktrain            $ 120.9 $ 117.0   3%     $ 389.0 $ 383.9   1%
 Non-Stacktrain           15.3    54.3 (72%)       96.5   180.0 (46%)
______________________________________________________________________________
Stacktrain Volumes
 North America           100.3    93.3   7%       318.0   300.1   6%
 International            43.3    45.5  (5%)      124.5   140.3 (11%)
______________________________________________________________________________
Stacktrain Average
 Revenue per FEU (2)    $1,205  $1,253  (4%)     $1,223  $1,279 (4%)
______________________________________________________________________________
______________________________________________________________________________
(1)Volumes  and  revenue per FEU data are based upon  shipments
   originating  during  the  period,  which  differs  from  the
   percentage-of-completion method used for financial reporting
   purposes.
(2)In  addition  to third party business, which is referred  to
   above  as  North  America  Volumes,  the  transportation  of
   containers  for the company's international customers  is  a
   significant  component of its stacktrain operations.   These
   shipments  are referred to above as International Stacktrain
   Volumes and, since they are eliminated in consolidation, are
   excluded  from Revenues and Stacktrain Average  Revenue  per
   FEU.

      Revenues  from the company's North America transportation
operations decreased 20% and 14% in the third quarter and first
three  quarters of 1996, respectively, compared with  the  same
periods  in  1995, primarily as a result of  the  sale  of  the
company's   rights  to  service  certain  domestic   intermodal
customers in the second quarter of 1996.  The sale reduced non-
stacktrain  revenues  and  related  operating  costs   in   the
company's  North  America operations in the third  quarter  and
first  three  quarters  of  1996, and  is  expected  to  reduce
revenues and related operating costs in future quarters.   Also
contributing  to the revenue decline in the third  quarter  and
first  three quarters of 1996 from the 1995 periods were  lower
rates  due to increased competition, industry-wide softness  in
demand and excess capacity.  Revenues in the third quarter  and
first  three  quarters of 1996 were positively impacted  by  an
increase  in the company's stacktrain volumes in the  U.S.  and
Mexico markets compared with last year.

      During  the  remainder  of 1996,  the  company  currently
expects modest growth in demand in the North America stacktrain
and  automotive  markets, and flat or lower rates.   Demand  in
these  markets  is dependent upon conditions in  the  U.S.  and
Mexican  economies  and  the extent to  which  U.S.  automakers
continue  to  operate  in  Mexico,  among  other  factors.   In
addition,  growth in these markets could be impacted  by  labor
disputes   involving   the  companyOs  customers   or   service
providers.  No assurances can be given that growth in demand in
these markets will materialize.

<PAGE>

TRANSPORTATION OPERATING EXPENSES
(In millions, except      Third Quarter        Year to Date
 Operating Cost per FEU)  1996    1995 Change     1996      1995 Change
______________________________________________________________________________
 Land Transportation    $209.2  $235.0 (11%)   $ 672.5  $  748.2 (10%)
 Cargo Handling          164.2   147.5  11%      470.8     439.6   7%
 Vessel, Net              87.2   100.0 (13%)     279.7     281.1  (1%)
 Transportation Equipment 50.0    50.6  (1%)     156.5     155.3   1%
 Information Systems      10.5    11.1  (5%)      32.3      37.0 (13%)
 Depreciation
  and Amortization        26.1    25.7   1%       83.5      79.0   6%
 Sales, General, Administrative
  and Other               50.1    87.7 (43%)     209.3     304.1 (31%)
______________________________________________________________________________
 Total                  $597.3 $ 657.6  (9%)  $1,904.6  $2,044.3  (7%)
______________________________________________________________________________
 Operating Cost 
   per FEU (1)         $2,483   $2,889 (14%)    $2,585    $2,869 (10%)
 Operating Ratio (1)      94%      93%             96%       96%
______________________________________________________________________________
______________________________________________________________________________
(1)Operating   Costs   used   in  these  calculations   include
   Operating, General and Administrative, and Depreciation  and
   Amortization  expenses, some of which  are  associated  with
   certain  International and North America revenues  that  are
   not  volume  related.  Excluded from these calculations  are
   the  1996 gains resulting from the net decreases in  benefit
   obligations  for  pension and postretirement  benefits,  the
   sale of the company's domestic distribution services segment
   and  the sale of a vessel.  In addition, the 1995 gains from
   the  sale of a vessel and vessel construction contracts  and
   liquidated  damages from the delayed delivery  of  two  C11-
   class vessels were excluded from these calculations.

      The  strengthening  of the U.S. dollar  relative  to  the
Japanese yen had a positive impact on operating expenses in the
1996 third quarter and first three quarters of approximately $4
million  and $14 million, respectively, compared with the  same
periods in 1995.  The yen/dollar exchange rate averaged 109 and
107  yen  to  the dollar in the third quarter and  first  three
quarters of 1996, respectively, compared with 92 and 90 yen  to
the  dollar  in the third quarter and first three  quarters  of
1995, respectively.

      Land  transportation expenses decreased in third  quarter
and first three quarters of 1996 from the comparable periods in
1995  due  to  the sale in the second quarter of  1996  of  the
rights  to  service certain domestic intermodal customers,  and
reduced  rail rates.  Additionally, company-controlled trucking
expenses declined in first three quarters of 1996, as a  result
of  the company's sale of its U.S. trucking operations in  June
1995.

     Cargo handling expenses increased in the third quarter and
first  three quarters of 1996 compared with 1995, primarily  as
result  of  higher stevedoring volumes in Hong Kong  and  South
China,  higher  stevedoring activity related to  the  company's
alliances, and higher rates in certain locations.  The revenues
for  cargo  handling services provided by the  company  to  its
alliance   partners   are  included  in  other   transportation
revenues.   This increase was partially offset by  lower  costs
resulting  from a weaker Japanese yen compared  with  the  U.S.
dollar  in the third quarter and first three quarters  of  1996
compared with the 1995 periods.

      Vessel  expenses decreased in the third quarter  of  1996
compared  with third quarter of 1995 primarily as a  result  of
cost  savings from the sale of six U.S.-flag vessels to Matson,
the return of three of the four L9-class vessels chartered from
Lykes  and  favorable  prior year subsidy  adjustments.   These
savings were partially offset by increased costs related to the
six new C11-class vessels, only two of which were in service in
the  third quarter of 1995.  Subsidy payments were lower  as  a
result  of  the vessel sales to Matson, partially offset  by  a
prior  year  subsidy adjustments.  Fuel prices were  relatively
unchanged in the third quarter of 1996 compared with the  third
quarter  of 1995, and increased 4% in the first three  quarters
of  1996  compared  with the comparable  1995  period.   Vessel
expenses decreased slightly in the first three quarters of 1996
compared with first three quarters of 1995 due to cost  savings
as     a    result    of    the    sale    of    vessels     to

<PAGE>

Matson  and the vessels returned to Lykes, and favorable  prior
year  subsidy  adjustments.  Offsetting  these  decreases  were
increased costs related to the new C11-class vessels, increased
purchases  of  vessel space from the alliance partners  in  the
Asia-Europe and Asia-Latin America services, and lower  subsidy
payments due to fewer vessels.

      Transportation  equipment costs decreased  in  the  third
quarter  of  1996 compared with the third quarter of  1995  and
increased in the first three quarters of 1996 compared with the
first  three quarters of 1995, reflecting the relative  amounts
of  increased  container lease costs and reduced rail  car  per
diem costs.

      The  decrease in information systems costs in  the  third
quarter  and  first  three quarters of 1996 compared  with  the
third  quarter  and  first  three  quarters  of  1995  was  due
primarily to the elimination of positions in late 1995.

      Depreciation  and amortization expense increased  in  the
third  quarter  and first three quarters of 1996 compared  with
the  same  periods  in  1995  primarily  as  a  result  of  the
deployment of the six new C11-class vessels, only two of  which
were in service in the third quarter of 1995, and other capital
spending after the third quarter of 1995.

       Sales,   general,  administrative  and  other   expenses
decreased in the third quarter and first three quarters of 1996
compared  with  the third quarter and first three  quarters  of
1995 due primarily to decreases in expenses related to position
eliminations   resulting   from  the  companyOs   reengineering
program.   Also  contributing to the  1996  decrease  of  these
expenses in the third quarter and first three quarters of  1996
was  the  inclusion  of expenditures in the third  quarter  and
first  three  quarters  of  1995 for corporate  initiatives  to
improve  the  company's financial and order cycle processes  of
$5.7  million and $18.3 million, respectively.  There  were  no
such expenditures in the comparable 1996 periods.  Included  as
reductions of these expenses in the third quarter of 1996  were
a  gain  of  $12.9  million resulting from the  curtailment  of
obligations  for  pension and postretirement  benefits  due  to
workforce  reductions,  lower  accruals  for  certain  employee
benefits based on current estimates and favorable insurance and
other  claims  experience.  Included  as  reductions  of  these
expenses  in  the  third quarter of 1995  were  gains  of  $3.6
million  from  the  sale  of a vessel and  vessel  construction
contracts,  and  $3.5 million in liquidated  damages  from  the
delayed  delivery of two C11-class vessels.  Also  included  as
reductions  of  these expenses in the first three  quarters  of
1996  were  a gain of $6.9 million on the sale of the company's
rights to service certain domestic intermodal customers  and  a
$1.6 million gain from the sale of a vessel.

      Net interest expense increased from $3.7 million and $7.3
million in the third quarter and first three quarters of  1995,
respectively, to $8.0 million and $27.6 million  in  the  third
quarter   and  first  three  quarters  of  1996,  respectively,
primarily due to debt incurred in connection with the C11-class
vessels purchased during 1995 and January 1996.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
(In millions)
                                 September       December 29
As of:                                1996              1995
______________________________________________________________________________
 Cash, Cash Equivalents and
  Short-term Investments           $ 308.5          $  135.7
 Working Capital                     210.6              65.1
 Total Assets                      1,927.0           1,878.8
 Long-Term Debt and Capital
  Lease Obligations (1)              718.3             698.9
______________________________________________________________________________

                              September 20      September 22
For the 26 weeks ending:              1996              1995
______________________________________________________________________________
 Cash Provided by Operations       $ 115.5          $  139.1
______________________________________________________________________________
INVESTING ACTIVITIES
 Proceeds from Sales of
  Property and Equipment           $ 161.7          $   39.2
 Proceeds from Sale of
  Distribution Services                2.0

 Net Capital Expenditures
  Ships                            $  69.5          $  188.1
  Containers, Chassis and Rail Cars   10.6              20.4
  Leasehold Improvements and Other    22.7              29.9
______________________________________________________________________________
  Total Net Capital Expenditures   $ 102.8          $  238.4
______________________________________________________________________________
FINANCING ACTIVITIES
  Repurchase of Common Stock       $ (14.8)         $ (139.6)
  Borrowings                          62.2             143.7
  Repayment of Debt and Capital Leases(43.0)           (22.9)
  Dividend Payments                   (7.7)            (11.8)
______________________________________________________________________________
______________________________________________________________________________
(1)Includes current and long-term portions.

     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
$158.4  million  in  cash.   This  transaction  is  more  fully
described   in  Note  7  of  Notes  to  Consolidated  Financial
Statements.

     The company took delivery of its final C11-class vessel in
January 1996.  To finance a portion of the cost of this vessel,
the company borrowed approximately $62.2 million in 1996 in the
form  of  vessel  mortgage notes under a  loan  agreement  with
European banks.  This debt is more fully described in Note 4 of
Notes to Consolidated Financial Statements.

      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.   Capital
expenditures   in   1996  are  currently  budgeted   to   total
approximately  $157 million, including $71  million  of  vessel
costs.   The  balance  is  expected to be  spent  primarily  on
terminal   equipment  in  North  America  and  Asia,   terminal
improvements  in  North  America, refrigerated  containers  and
computer   systems.   The  company  has  outstanding   purchase
commitments  to  acquire  cranes,  facilities,  equipment   and
services  totaling $99.3 million.  In the first three  quarters
of  1995, in addition to vessel expenditures of $188.1 million,
the  company's other capital expenditures totaled $50.3 million
primarily  for purchases of chassis and terminal and  leasehold
improvements.

      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.  As of September 20,  1996,
the company paid $14.8 million to repurchase 627,100 shares  of
its common stock under this program, as more fully described in
Note 6 of Notes to Consolidated Financial Statements.

<PAGE>

      On  October  9, 1996, the Board of Directors  declared  a
quarterly  cash  dividend of $0.10 per share of  common  stock,
payable on December 2, 1996 to common stockholders of record on
November 15, 1996.

      The  company believes its existing resources, cash  flows
from  operations  and  borrowing capacity  under  its  existing
credit   facilities  (see  Note  4  of  Notes  to  Consolidated
Financial  Statements  for a description of  these  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 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  that  could  cause  actual
results to differ materially from those projected.

      The severity of the challenging conditions expected  for
the  company  and  the shipping industry  generally,  and  the
impact of those conditions on the company's operating results,
will  depend  on factors such as 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 continuation of the company's  alliances,
which comprise a significant factor in the company's long-term
strategy  to  remain competitive, re-negotiation  of  recently
ratified  labor contracts due to the enactment of new maritime
support  legislation  and  the pace  and  degree  of  industry
deregulation, including whether amendments to the Shipping Act
of 1984 are proposed and enacted.

      Demand  in  the  trans-Pacific market  is  dependent  on
factors  such as the quantity of available import  and  export
cargo in this market and economic and political conditions  in
the U.S. and other Pacific Basin countries.  The magnitude  of
the  impact on the company of any growth or contraction in the
trans-Pacific  market  will depend on  whether  and  when  new
vessels ordered by competing carriers are delivered and  where
they  are  ultimately deployed and further vessel  orders,  if
any,  by  competing carriers.  Because a number  of  competing
ocean  carriers have placed orders for the construction  of  a
significant number of new vessels, growth in capacity  in  the
trans-Pacific  market  in 1996 and  1997  is  expected  to  be
significantly greater than growth in demand.

      Growth in demand in the North America stacktrain  market
and  demand  for automotive shipments will depend on  economic
and political conditions in the U.S. and Mexico, including the
relative  values of the U.S. dollar and the Mexican Peso,  and
the  extent  to which U.S. automakers continue to  operate  in
Mexico,  among  other factors.  Growth in these markets  could
also  be  impacted by labor disputes involving  the  company's
customers or service providers.

      The  continuation of savings in operating expenses,  and
further  incremental savings, if any, in connection  with  the
company's  reengineering  program and  organizational  changes
will  depend on the ultimate future effectiveness and  results
of  those efforts.  There can be no assurance that the company
will  continue  to realize these savings, and changes  in  the
timing  of  any  anticipated savings by the  company,  or  the
failure  to  realize  some  or all  of  these  savings,  could
materially  and  adversely  affect  the  company's   operating
results.

<PAGE>

     Other risks and uncertainties include the degree and rate
of market growth or contraction in other markets served by the
company and the company's ability to respond in mitigation  of
any  contraction or to take advantage of such growth,  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.  The companyOs inability to re-
negotiate  agreements with the unions through  the  collective
bargaining   process   on  terms  and   conditions   providing
sufficient  labor  efficiencies  to  compensate  for   reduced
subsidy  payments  from  the  enactment  of  maritime  support
legislation could result in work stoppages, strikes  or  other
labor difficulties or in higher labor costs, which could  have
a  material adverse effect on the company's operating results.
The  company has in the past experienced such difficulties and
there can be no assurance that any such difficulties will  not
occur in the future.

      Also,  the  company  is subject  to  inherent  risks  of
conducting   business  internationally,  including  unexpected
changes  in,  or  imposition  of,  legislative  or  regulatory
requirements, fluctuations in 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,
potentially   longer   payment  cycles,  potentially   greater
difficulty  in  accounts  receivable  collection,  potentially
adverse  taxes and the burden of complying with a  variety  of
foreign   laws.    In   addition,  in  connection   with   its
international  operations, the company is subject  to  general
geopolitical risks, such as political and economic instability
and changes in diplomatic and trade relationships affecting it
or its customers.

       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 2,990 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.   A
motion  for reconsideration of such dismissal is pending.   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 August 1997.

      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 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
_______            _______________________


27   Financial  Data  Schedules  filed  under  Article   5   of
     Regulation  S-X for the third quarter ended September  20,
     1996.

(b)  Reports on Form 8-K

     On  May  17, 1996 and July 16, 1996, the company  filed  a
     Form  8-K  and  a Form 8-K/A, respectively, dated  May  2,
     1996,  reporting the sale of the rights to service certain
     domestic intermodal customers to Hub Group, Inc., and  the
     pro-forma effects of the sale.

<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  31,  1996           By /s/ William J. Stuebgen
__________________________           __________________________
                                            William J. Stuebgen
                                               Vice President,
                                               Controller and
                                       Chief Accounting Officer