This paper presents a Fit Degree based Two-step Lookahead algorithm (FDTL) for the NP hard container loading problem. Several evaluation criteria, the fit degrees, are defined to construct different initial solutions as well as to explore different portions of the search space. Then a two-step lookahead tree search procedure is incorporated for the sufficient search such that the algorithm could find better layouts compared to a one-step lookahead tree search procedure. FDTL is tested on two sets of typical instances: 800 instances as proposed by Bischoff and Ratcliff (1995), and 15 instances as proposed by Loh and Nee (1992). Experiments show that this new algorithm improves among the known algorithms on the space utilization.