The outlook for the future is promising with projections for strong containerised trade growth well into the next decade.

If Asia remains the world’s factory floor, the Americas are its showroom. US imports from China alone in 2006 grew 15.4% to a record US$287.8 billion. Retailers, auto-makers and the hi-tech and fashion industries were among the importers shipping goods to the Americas.

APL carried a good portion of their freight. Sister company APL Logistics helped manage the complexity of supply chains stretching from places such as China, India and Vietnam to the US, Canada and Latin America.

In 2006, volumes generated by our Transpacific and Latin America container shipping trades totalled 892,000 FEU. The Americas provided 67% of our overall logistics revenues.

The outlook for the future is promising with projections for strong containerised trade growth well into the next decade. In 2006, we took steps in the Americas to position ourselves for growth.

APL began the much-needed expansion of its US West Coast marine terminals. The terminals in Los Angeles, Oakland and Seattle are strategic differentiators – providing cost-effective gateways to the American heartland, and beyond. But with container volumes in 2010 likely to be 50% greater than they were just two years ago, terminal capacity is a concern.

Therefore, APL began a major renovation of Middle Harbor Terminal in Oakland after finalising a 15-year lease extension. With two five-year options, the agreement propels the APL-Oakland global trade partnership well into the 21st Century. When the renovation is finished in 2008, terminal handling capacity will increase by about 50%.

Meanwhile, negotiations began with the Port of Los Angeles on a proposed 40–acre expansion of APL’s Global Gateway South (GGS). Our goal is to give APL a fifth container ship berth at the nation’s busiest port.

There was more good news for our container terminals in 2006 when the California Trucking Association (CTA) named GGS the Fastest and Best Overall Marine Terminal at the ports of Los Angeles and Long Beach. It was the second time in two years that the CTA singled out APL. More imports and exports move through Los Angeles and Long Beach than anywhere else in the US, so recognition as the ports’ number one terminal operator validates our industry leadership.

Even though industry growth is assured, it won’t be unfettered. The US freight transportation system is ageing and ill-equipped to handle future volumes. In 2006, APL Logistics peered into that future and introduced an innovative antidote – OceanGuaranteed^SM. This is the first in a new era of products designed to cope with ailing US transportation infrastructure.

We have received widespread recognition for our contribution in putting freight transportation into the public spotlight.

It’s essential to balance the desire to improve infrastructure to support growing international trade with environmental concerns.

Community, political and regulatory leaders are increasingly troubled by the impact of cargo transportation on air and water quality. These concerns can make expansion of the transportation system problematic. In this area, APL took innovative steps in 2006. We teamed up with the US Environmental Protection Agency and the Port of Los Angeles to begin testing fuel emulsification in one of our vessels calling at California ports. The process injects water into marine engine fuel with the prospect of cutting smog-producing emissions by 20% or more.

In March 2007, we announced that we will convert vessels to cleaner-burning low-sulfur fuel when they call at ports in the Pacific Northwest.

In October APL, the Port of Seattle and numerous public safety agenies completed a comprehensive test of security procedures at the port to respond to an emergency such as a terrorist threat.

Elsewhere, in response to customer demand and our confidence in the growth potential of South America, we significantly expanded our footprint and capabilities in this fast-growing region (see story, below).

Innovations such as these are part of our tradition in the Americas. They follow in the footsteps of pioneering efforts such as the LinerTrain intermodal service and stacktrains – developments that presaged the exponential growth in containerised trade growth that we see today.