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Holiday Prices Could Rise

September 22, 1998

NEW YORK (AP) _ Shipping delays between Asia and the United States could mean higher prices for holiday shoppers, The Wall Street Journal reported today.

Just before the holiday shipping season, transportation hassles are causing major delays for U.S. importers awaiting teddy bears, bicycles, furniture and other goods.

Transportation costs account for 5 percent to 10 percent of the price of goods, and the shipping problems won’t ease before Christmas, analysts told the Journal.

There’s an enormous demand for Asian products because of the region’s currency devaluation, which makes goods cheaper for U.S. buyers.

Because U.S. goods are comparatively so expensive, ships head to Asia virtually empty and then return packed. Officials for the shipping lines, saying the imbalance costs them money, pulled their extra ships from the Asian trade this spring, causing the delays and back-ups at overloaded ports.

Importers accuse shipping lines of breaking agreements so they can illegally charge higher rates. Federal Maritime Commission officials said Monday they would investigate.

Some importers, such as luggage maker Samsonite Corp. and pet-goods supplier Hartz Mountain Corp., are splitting their business among several ship lines or using alternate routes through the Suez Canal to get goods on time.

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