China's Hebei Ocean Shipping Corp (Hosco) is increasing personal benefits to its seafarers to cope with shipping's worsening labour shortage.

The Hebei-based bulker and tanker owner has said it will reimburse annual travel taken by families to meet relatives working on board its ships.

Recently, families of masters and chief engineers have been given a monthly allowance of CNY 5,000 ($716).

The company also says it increased seafarers wage four times in the past year and increased meal benefits from $5 to $8 per day.

Hosco has also switched its bonus payments from US dollars to Chinese yuan to compensate for the depreciation of the greenback.

The initiative comes as shipping companies are having to dig deeper into their pockets to keep seafarers happy.

A recent survey by employment agency Shiptalk found that absence from home was the biggest reason officers returned to shore.

It notes that increased welfare provision such as private health insurance is becoming a familiar strategy by shipmanagers and owners to keep seafarers at sea.

Clarkson's research department estimates the labour market is set to tighten further because of the massive backlog of newbuildings and a growing world fleet.

It points out that the bulk and container fleet is growing four times as fast as in 2003, with 900 ships in this sector delivered in 2007.

It predicts this will continue for three years with about 742 ships coming into the market each year for the next three years. These ships will require another 16,000 extra crew annually over the period.

There also will be new LPG and LNG tankers, offshore vessels, car carriers, chemical tankers, adding around 500 ships per year and boosting the extra crew requirement to roughly 27,000 anually until 2011.

Clarkson research head Martin Stopford says higher financial demands on owners will result increasing operational costs.

He said: "As sophisticated and extremely expensive ships leave the yards, it is not difficult to conjure up a scenario in which qualified officers can name their own price. Indeed, there is evidence this is already happening."

By Hans Henrik Thaulow and Adam Corbett, Shanghai and London