In recent times, there has been much talk about the "new normal". But in the coming year we shall be re-acquainted with "old normal" punctuated by a peak seasons and slack seasons, and last minute air freight booms before Christmas.

And then there are changing circumstances occasioned by the peaks and troughs of trends which inevitably makes victors  and victims in that endless game of musical chairs, or what one sea lawyer called "who's holding the bag".

Will it be the carrier that bought too much or too little in the fuel futures, either missing enormous cost savings that might have been, or having to pay through the nose for fuel that is now unaccountably cheap today when so many expected it to be expensive? Or could the shipper or carrier was caught holding the bag by signing a long term contract when he would have been better off sticking to the spot market. Such are the usual vagaries of the shipping world.

But because of the Covid crisis there have been changes that impinge on the old normal and create new conditions popularly known as game changers.

For example, one wonders whether the major carriers - Maersk, MSC, CMA CGM - who have stampeded into the air freight business, acted wisely or were only being tempted by the extraordinarily high demand and rocketing rates, produced during the Covid crisis.

So much of air freight is "air fright" - ocean shippers panicked into paying premium air rates to save a golden customer from desertion. Granted, the Covid scare, deliberately fostered by the bureaucracy under the maxim "never let a crisis go to waste" was a new reality that triggered those responses but disappeared as soon as mandated mask wearing disappeared.

One suspects that Matson, the big shipping line in Hawaii, responded more sensibly, even if CEO Matt Cox had to eat humble pie, when he back-tracked on his prediction that his do-or-die premium China-US west coast service would make money through 2022. But when the US west coast congestion abated, mostly because the cargo went to the east and Gulf coasts via Panama to cause congestion there, the jig was up. Not enough would pay premium prices for Matson's special treatment if normal treatment would do the job just as well. And Mr Cox sounded the retreat realising that it was a premium service was good as long as it lasted, but its time had come and gone.

US container imports aren’t falling off a cliff, but they’re slowing down to more normal levels seen before the Covid scare, noted Bloomberg in October when the market direction had settled in a southerly direction.

The cost of shipping goods from China had slumped to the lowest level in more than two years as the world economy stumbled, dimming prospects for container carriers that had turned in record profits during the Covid panic.

An FEU from the world’s largest port of Shanghai to Los Angeles fetched US$3,779 at the time and for the first time the spot price was below $4,000 since September 2020 and half the level of only three months ago, according to Drewry.

Multiple headwinds hit developed and developing economies alike, from soaring inflation and a volatile dollar to central bank interest-rate hikes and trade disruptions blamed on Russia’s war in Ukraine.

“It’s fair to say that the demand outlook for the transpacific and container shipping generally is receding quickly,” said Simon Heaney, a senior manager of container research at Drewry.

Factories in Europe and the rest of Asia are also scaling back production. China’s economic slowdown is also cutting into import demand, with companies in Asia and Europe seeing weaker growth or declines in orders from Chinese companies.

For the world’s shipping lines, it’s providing some relief to their packed sailing schedules yet threatening to slow an eye-popping run of profitability driven during the pandemic by stronger-than-normal consumer demand for household items.

But there are new factors impacting the "old normal". There is inflation, of course. As long as tax and spend policies hold sway in the upper reaches of the bureaucracy, inflation will continue to rage, retarding the rate of consumer purchasing. This tends to nullify the cost-saving advantages of economies of scale because the costs of the massive, and massively expensive infrastructure cannot be borne by the revenue drawn from shrinking throughput. That was one of the reasons for the fall of the Roman Empire.

Walmart, Amazon and Ikea were among companies that signed contracts when spot prices were at near-record levels, according to analytics firm Xeneta, but as inflation bites importers in the US and Europe want to ship fewer goods from Asia, it said.

Understandably, many of the carriers’ customers want to re-negotiate for discounts. Agents and forwarders in Asia have received calls recently from cargo owners asking to lower shipping costs, with some exporters complaining about the unfairness of paying almost twice as much as the spot market. Shipping companies want exporters to bulk up their volumes, but many are refusing to because of the weaker economic outlook.

“We polled customers and 50 per cent of them successfully negotiated for lower rates on term contracts,” said Xeneta analyst Peter Sand. “The drop in freight rates is due to falling demand globally, and port congestion has eased, allowing for more efficient operation of the ships.”

Because of lockdowns and quasi-lockdowns, not the great mass of consumers, not mention millions working from home, brought about a significant change in spending patterns. Pre-Covid, much was spent on entertainment. When this became difficult if not impossible, the spending shifted from services to ecommerce, resulting in a boom in that sector.

Its loss will undoubtedly reduce the volume of goods shipped from overseas, but will have little impact on the number of goods sold for the simple reason that massive inventories have already been shipped. That's what caused the congestion. No one knew when or where the bureaucrats would strike next, so every factory and every shipper shipped as much as he could as soon as he could because he could not know when or for how long the next lockdown would prevent him from doing so.