Investor relations Annual report

Annual Report 2000

(For year ended March 31,2000)

**Business Review**



Container Business

Operating revenues from containership services for the term under review amounted to ¥186,214 million (U.S.$1,754 million), up 3.2%.

Fiscal 1999 was the first year for conclusion of individual service contracts in the trans-Pacific trade under the U.S.’s new Ocean Shipping Reform Act of 1998, and as a result of which restoration of freight rates has been progressing.
      Volume of cargo movement to the U.S. from Asia proceeded to be positive as a result of the continuing economic boom prevailing in North America.
      On the Asia/Europe service route, cargo volume was favorable, including shipments destined to the Mediterranean.
      On Inter-Asia service routes, cargo loadings increased in volume due to a recovery in most Asian economies. In October, the Company was successful in increasing its Japan/the Straits service line to two sailings per week on its own. Furthermore, a new service route was opened last January between North Asia and the Straits.
      In the meantime, freight rates dropped due to growing competition in the trans-Atlantic trade and Asia/East Australia routes, resulting in profitability going down.
      In addition to already-established tie-ups with the other lines, the Company newly realized partial tie-ups with Zim Israel Navigation Co., Ltd. and CMA-CGM S.A. in the Asia/Europe service route.
      In Inter-Asia routes, we proceeded to collaborate with Tokyo Senpaku, Ltd., Malaysian International Shipping Corporation Berhad and Regional Container Lines.
      Once those efforts were in practice, we were successful in improving our services and reducing costs and expenses, the bottom line improving significantly as compared with the previous year.
      As to outlook for the future, we will continue making efforts for reduction of costs and expenses as well as reinforcing our fleet so as to expand our services with greater world-class cost competitiveness.

The new service routes commenced effective from April 2000:
	Asia/East Coast of the U.S. via Panama Express Service (AEX)
		Weekly fixed-day service by 3,400-teu vessels with a rotation of Shanghai - Yantian - Hong Kong - (Panama) - New York - Norfolk - Charleston - (Panama) - Tokyo - Kobe - Shanghai
	Asia/Mediterranean Express Service (AMX)
		Weekly fixed-day service by 3,500-3,800-teu vessels with a rotation of Xingang - Shanghai - Hong Kong - Shekou - Singapore - Port Kelang - Colombo - (Suez) - P.Said - Haifa - Naples - Genoa - Fos - Barcelona - Valencia - P.Said - (Suez) - Singapore - Hong Kong - Xingang
	Mediterranean/East Coast of the U.S. (TAS-3)
		Weekly fixed-day service by 2,000-teu vessels with a rotation of Genoa - Naples - Barcelona - New York - Norfolk - Charleston - Genoa
	Baltic Express Service
		On April 18, 2000 "K" Line (Europe) Ltd. started a weekly fixed-day service to link Finland with its global container services under the name of Baltic Express Service, its third dedicated Inter-Europe service. Covered Finnish ports are Rauma and Mantyluoto. In Bremerhaven, connections are made with JEX, TAS-1 and TAS-2

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