DBS Group Holdings Ltd, ABN Amro Holding NV, ING Groep NV and three Taiwanese banks are arranging a US$250 million loan for Wan Hai Lines Ltd (萬海航運) to buy more vessels, said John Chen, the shipping company's finance general manager.
The International Commercial Bank of China (中國商銀), First Commercial Bank (第一銀行) and Hua Nan Commercial Bank (華南銀行) are the Taiwanese banks helping arrange the 10-year loan, Chen said.
Wan Hai, the nation's No. 3 shipper by market value, will use the loan to help it buy nine vessels as it expands its fleet, Chen said.
Stronger demand for Chinese goods is filling most of the cargo vessels to the US from Asia, boosting the cost of chartering ships.
"Prices to charter vessels soared by about 50 percent in the first quarter compared with the same period last year," Chen said. "We reckon it will help stabilize costs by buying vessels instead of chartering them to meet rising demand."
The nine vessels, to be delivered between March next year and April 2006, will cost US$340 million and take the size of its self-owned fleet to 49 by the end of 2006, he said.
Vessels carrying cargo to the US from Asia were almost full in the first quarter as demand for Chinese goods increased, a group of shipping lines said late last month.
The shipping companies filled an average of 95 percent of their vessels, said Niels Erich, a spokesman for the Transpacific Stabilization Agreement, which consists of 14 shipping lines.
Bookings indicate similar demand for cargo space for next month, the group said.
"Advance bookings and discussions with customers suggest that the trend of tight space will continue through much of April, and resume after a typical May lull," the shipping lines, which account for about 90 percent of the Asia-US trade, said in a statement.
The group's members, including Evergreen Marine Corp (長榮海運) and Yang Ming Marine Transport (陽明海運), are now in talks with their customers to raise rates by as much as US$450 per 40ft container, after shipments to the US from Asia rose by 9.3 percent last year.
The trans-Pacific route is the world's busiest.
Rates are also increasing to help cover rising costs. Costs rose by more than 25 percent last year, as charter rates for vessels rose. Higher oil prices, the rising cost of containers due to increasing steel prices, and congestion at ports also led to the higher costs, the group said.
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