Logistics and transport group Fritz Companies is negotiating with banks to provide shippers with short-term loans using cargo in transit as collateral. Company president Dennis Pelino said Fritz, which had done similar deals in Latin America, was planning to expand the service to Asia. 'We have already completed 70 per cent of the arrangements and will be ready to unveil our plans in September,' he said, adding he was confident this type of service would gain popularity. Executives of the San Francisco-based freight transport group are talking to banks about the service, which will cover transit periods of up to eight weeks. Mr Pelino said the company, which provides logistics services for manufacturers, importers and exporters, would make the trade finance vehicles available to interested parties during discussions. He said this arrangement would allow a shipper to use the bank's funds while the cargo was in transit between Asia and destinations such as the United States. Mr Pelino predicted this type of financial service would become a key part of supply chain management. Fritz's role would be to facilitate these deals by bringing banks and the manufacturer or consignee together, he said. Asia accounts for 30 per cent of Fritz's global revenue. Each year, the company moves 80,000 feu (40 ft equivalent units) between Asia and the US, 30,000 feu between Asia and Europe and 18,000 feu in intra-Asia trade. Mr Pelino said Fritz, through an agreement with China Airlines, had secured cargo space for customers on flights between Taiwan and Hong Kong. The company was striving to keep its costs down, he said, adding it was able to get the best rates because of its huge volume of cargo. About 60 per cent of Fritz's volume of business was under contract, and the company had committed to transporting the cargo regardless of the season, Mr Pelino said. Fritz, which is a key non-vessel-operating cargo carrier (NVOCC), annually exports 140,000 teu (20 ft equivalent units). Mr Pelino said availability of cargo space was going to become an important issue this year, and even if a shipper was willing to pay a premium price, there was no guarantee of securing space. However, Fritz was guaranteeing space to customers, he said, though cargo capacity would be a problem during the peak season between July and November. Asked about the Asian financial crisis, Mr Pelino said the freight forwarding industry would continue to see business moving ahead.