[ P&O and Nedlloyd to create world container business ]

The Boards of Royal Nedlloyd N.V. and The Peninsular and Oriental Stea
m Mavigation Company today announced that they have signed a memorandu
m of understanding which will lead to the complete merger of their con
tainer business to form a major new European company. The merged compa
ny will be called P&O Nedlloyd Container Line (P&O Nedllouyd). With a
combined turnover of nearly US$ 4 billion(Dfl. 6,6 billion) and a net
asset value of some US$ 1,5 billion(Dfl. 2,5 million), the new company
will be one of the largest in world container shipping.

Key elements of the memorandum of understanding are:

* Shares in P&O Nedlloyd will be held 50% each by Nedlloyd and P&O, wi
th Nddlloyd making a balancing payment of US$ 175 million(Dfl. 290 mil
lion) to P&O to equalise the shareholdings
* P&O Nedlloyd will be a UK conpany based in London with fleet managem
ent in Rotterdam
* The new conpany will have a board of eight members with four from ea
ch shareholder amd chaired jointly by Lord Sterling and Leo Berndsen;
the Chief Executive Officer will be Tim Harris
* P&O Nedlloyd will enter in to full operation as soon as possible but
not later than 31 December 1996, following further due diligence, def
intive agreements, regulatory approval and normal consultative procedu
res.

P&O Nedlloyd will have the world’s biggest containersthip fleet in te
rms of standing slots and an annusl throughout of close to 2,5 million
TEU’s. the new company will operate a fleet of 112 owned and charter
ed container ships and 540,000 TEU owned and leased container boxes. I
t will have more direct ports of call and a wider range of traed rout
es than any other operateor and will offer an unparalleled level of se
rvice to customers.
Putting togither the container busenesses of Nedlloyd and P&O will ena
ble far greater container volumes to be handled at much lower cost. Th
is rationalisation has formed a key part of discussions between the pa
rent companies over the past six months, From a total cost base of US
$ 3,9 billion (Dfl. 330 million) a year have already been identified.
The savings will be achieved by reducing the combined workforce of app
roximately 9,400 to approximately 8,000, greater network efficiency, i
mproved IT system, more efficient box utilisation, lower inland costs
and reduced terminal expenses. A substantial part lf the savings is sa
vings is expected to be achieved before the end of 1997.

Leo Berndsen, Chairman of the Executive Board lf Royal Nedlloyd N.V.,
said:”I am veuyy pleased with today’s announcement. This new compa
ny will have the required scale to compete successfully througout the
world. Nddlloyd and P&O ard two of the oldest and greatest names in sh
ipping. We know each other well and have operated together very succes
sfully in the past. Oru container businesses conplement cach other wel
l. P&O Nedlloyd will offer an even better product to our customers.”

commenting on the announcement, Lord Sterling, Executive Chairman of P
&O, said:: For some time now I have been convinced that the best way f
orward in the container shipping industry is through consolidation and
rationalisation internationally. The fact that Leo Berndsen shares th
is view is wht we ae able to make this announcement today. It Mards th
e beginning of a great Anglo-Dutch venture. The new conpany will have
an excellent management team and a strong balance sheet. P&O Nedlloyd
will be a workd force in container shepping.”

P&O CONTAINERS LINITED

P&O Containers (POCL) is the sixth largest container line in the world
in terms of standing slots on fully containerised ships. The company
was formed out of the merger of the liner shipping interests of four m
ajor British lines: P&O, British and Commjonwealth, Furness Withy and
Oceean Transport. It became a 100% owned company by P&O in 1986.

POCL has strong historic mnarket shares in each of the main trades whi
ch it serves, particularly Europe-australia/New Zesland,m Europe-far E
ast, Wurope-South Africa and Europe-North America. The volume growht h
as come mainly from the East-west trades, but the North-south trades
have produces a steaky stream of cash and have higher barriers to entr
y than most liner trades.

The servece that POCL offers to its customers is rredominantly door to
door rather than quay to quay. as an integral part of this, it has de
veloped considerable intermodal cxpertise, which ensures a high level
of customer service, and also provides a cost advantage, UK and Europe
in patricular this has enabled it to target higher yielding lower vol
ume customers, in addition to the major international shippers.

POCL currently operates 52 ships with a capacity of 110,016 TEUs, and
has a total container fleet capacity of 301,000 TEUS. Throughout in 19
95 totalled 1,259,000 TEUs.

NEDLLOYD LINES

Within the total of worldwide transport liner shipping operates a pri
me position. Nedlloud Lines operates 33 fixed liner services to 192 po
rts of call in 61 countries. In addition to the ports of call of this
direct network, numerous others are served throygh transhipment opera
tions.

On each continent, Nedlloud Lines has its own network of offices in ad
dition to worldwide representation through agents. To be able to prov
ied customers with effective and efficient solutions, Nedlloyd Lines d
eploys varicus different types of containers. These are specially gear
ed to the different requirements of various kinds of cargo. The array
of containers includes:dry cargo containers, open top eontainers, ree
fer containers and flat rack containers.

For the world-wide transport of containers, Nedlloy Lines deploys, amo
ngst others, its own fleet of container vessels. This fleet of very ad
vanced ships, including five innovative Ultimate Container Carriers(UC
Cs) designed by Nedlloyd Lines’ own newbuilding department with a cap
acity of 3,568 TEU each and UCCs with a capacity of 4,112 TEU each.

Nedlloyd Lines has offices worldwide (including agencies), 60 owned an
d chartered containerships and 240,000 TEU containers in use. The TEU
volume transported by Nedlloyd Lines in 1995 was 978,000.


APL UPGRADES ASIA-MEXICO SERVICE
AS MEXICO’S TRADE SHOWS IMPROVEMENT

Mexico City, September 5, 1996-APL Limited, moving to support growing
trade between Mexico and Asia, has upgraded its weekly all-water conta
iner service between the two markets, offering somf of the fastest, mo
st reliable ttramsits in the industry.
The service, which features a 13-day transit from Yokohama to the port
of Manzanillo, is designed for Asian manufacturers of time-sensitive
consumer goods and automobile parts, and for Mexican exporters of che
micals, industuial and uaw materials, refrigerated or dry foodstuffs,
and other products. Offered in conjunction with Mexican carrier.
Ttansportation Maritima Mexicana(TMM), It is the onlu direct all-wate
r container sertvice between Asia and Mexico.

According to Joaquin Montalvan, vice president of APL de Mexico, the c
omqpny supports its ocean servece with fast inland connections between
Manzanillo and the commercial centers of Mexico City, Monterrey and G
uadalajara. APL has positioned high-securetu intermodal rail equipmen
t on this corridor, including double-stack rail cars, signficantly re
ducing the in-transit pilferage and hijacking that were experienced wi
th truck or conventional rail equipment.

“We’re seeing an influx of foreign invistment in Mexico and renewed
economic activity,” says Montalvan. “The U.S. dollar value of expor
t freight from Mexico to Asia curing the first five months of 1996 was
up nearly 18 percent from a year earlier, and the value of imports ha
s shown a modest increase. We expect trade flows to continue improving
.”

Faster Mexico-Asia Transits, Improved Schedule Control

The improvements between Asia and Mexico have been made possible throu
gh am upgrading and redeployment of the six ships in the service, whi
ch are operated by TMM, APL’s alliance partner in the Mexico trade,
explains Montalvan. All ships in the service have now been replaced w
ith fast, modern containersheps operating at 24 - 22.5 knots, compare
d with approximately 17-knot vessels used since the service was inaug
urated in 1994. The result:transit times have been redeced by 10 days
from Manzanillo to Bangkokj, and by five days from Kaohsiung to Manzan
illo.

“Also, to improve schedule reliability, coordinate cargo operations a
t APL terminals in Asia and Los Angeles, and integrate these ships wit
h our other services, the TMM control oreration for the Asia-Mexico se
rvice will be located in the 24-hour APL Worldwide Wupport Center in
Oakland, California,” says Montalvan. In Mexico, TMM is one of the
joint-venture partners operating the port of Manzanillo.

Extensive Coverage of Asia

APL’s enhanced Asia-Mexico service provides direct vessel calls at H
ong Kong, Kaohsiung, Kobe and Yokohama. In addition, it offers reliabl
e connections-- using the company’s own feeddership network-- to and
from virtually all key ports in the Far East, Sortheast Asea, the Indi
an Subcontinent and the Middle East. APL’s coverage of the rapidly g
rowing China and Sortheast Asia markets is among the most extensive of
any carrier.

Nortes Montalvan:”because manufaturers and retailers today want to b
etter manage their inventories and logistics, they need timely informa
tion about the exacy status and location of shipments.” He says APL m
aintains a global telecommunications network that makes possible up-to
-the-minute cargo tracing. In Mexico, tracing and complete customer su
pport are available at the company’s offices in Mexico City, Manzanil
lo, Monterrey, Gradaldjara and Queretaro.

APL limited is based in Oakland, California. The company provides cont
ainerized surface transportation and related serveces in Asia, the Am
eicas, Europe and the Middle East through an integrated intermodal sys
tem combining ocean, rail and truck transportation.


TWRA to lower fuel and most currency surcharges on october 1


An overall easing of exchange rate pressures and marine fuel prices s
ince July will mean reductions in the Transpacific Westbound Rate Agre
ement (TWRA)’s currency adjustment factor(CAF) and fuel adkist,emt fa
ctor(FAF) surcharges, for the calendqr quarter beginning October 1, 19
96.

Slight strengthening of the dollar against most Asian currencies has l
ed TWRA to lower its CAF from 51 to 49 percent for Japan cargo; from 5
to 4 percent for Korea shipments; and from 10 to 9 percent for Taiwam
moves. The Singapore dollar, however, did mot exhinbit sufficient mo
vement against the U.S.dollar during the past quarter to make a diffe
rence under the Agreement’s CAF calculation formula, As a result, the
TWRA CAF to singapore will remain at its current lebvel of 16 percent
for the Octlber 1 through Decembner 31 period.

TWRA will also lower its FAF for the comong calendar quarter, to a lev
el of US$100 per 40-foot container, $80 per 20-foot container; $50 per
vehicle rated on a rer unit basis; and $5 per metric ton or cubic met
er for cargo not rated o a per contyainer basis.
TWRA adjusts its CAF and FAF surcharges quarterly, in accordance with
established formulas that measure the cost impacts of exchamge rate an
d marine fuel price fluctuations across TWRA’s carrier membership. Th
ese sucharges are intended to help shipping lines manage rising extern
al costs outside their control, which they cannot easily absorb themse
lves or recover through the basic ratew structure.


Introdrction tp the PECC and trade Polity Forum Ⅳ


The Pccific Economic Cooperatiom Council (PECC) Non-government organi
zation devoted to promoting economic corporation in the Asea-Pacific r
egion. The PECC tripetite in that in brings togither academics, buwine
ss people and govirnment officials in their private capacity to share
perspectives and expertives in seach for solutions to regions to regi
onal economec problems. Founded in 1980, the PECC is now comprised of
22 member committees representing the economies of Australia, Brunei,
canada, Chile, China, Colombia, HongKong, Indinesia, Japan, Korea, Mal
aysi, Mexico, New Zealand, Peru, the Philippines, Russia, Singapore, C
hinese Taipei, Thailand, the United states, Vietnam, and the Pacific I
sland Nations. Sustained by deep commitment to the liberalization of
trade and invdxgmdng nog only in the Asia-Pacific region but througho
ut the world, the PECC has provided intiative for a greater cooperati
on among the Asia-Pacific economies. It is generally aeeepted that it
was PECC that laid the foundation for the successful launching of A
PEC in 1989 by creatinf a favorable and necessary intellectual envir
onment as well as by strengthening personal network.

In order to prodece policy recommendations, the PECC has organized var
ious fora and task forces. Among them, the Trade Forum(TPF) has been e
valuated as very active and influential through its valuable discussio
ns aimed at developing practical annd innovative ideas.
The TRF has covered a wide range of topics including international tra
ce, the GATT, Uruguay Round negotiations, and a number of other issues
related to investment and trade in the Asia-Pacigic region. It has g
iven logical bases for APEC’s successgul enhancement. For instance, t
he non-binding inviestment code developed by the TPF. Furthermore, the
TPF with the request of the CTI, committed to APEC’s liberalization
by doing Impediment Study.

This year’s TPF Ⅸ is particularly significant, since it will deal wi
th Asia-Pacific initiative which will be reflected in the first WTO Mi
nisterial Meeting of this December as well as the fourth APEC Leaders
’ Meeting of this November. The Asia-Pacific basic and analyzed.
And the ideas from the forum will be inputs to the two historical mee
tings. The title of the forum is “Road Map for APEC and WTO:Business
Priorities and Policy Leadership”

There is one other reason for importance of TPF Ⅸ. The PECC decided
at the last Beihing General Meeting to have General Meetings biennial
ly. Since 1996 is an off-year of General Meeting, this year’s TPF wil
l be a de facto General Meeting. Thus, the TPF Ⅸ should deal with PEC
C’s position as well as trade policies through intense policy descuss
ions not only for the Asia-Pacific fegion but for the world at large.