Ocean shipping companies booked record profits in 2022. Now, with exports and imports slumping as U.S. and European shoppers turn to services, shippers are discounting their prices and contemplating the prospect of a price war to lure customers, The Wall Street Journal reported.

Sailing a loaded container from China to Los Angeles cost $1,238 last week, less than one-tenth the peak price of $15,600 a year ago, according to the Freightos Baltic Index.

Seaborne imports to the U.S. fell 12 percent in volume last month compared to January and 26 percent year on year, the National Retail Federation estimated.

In China’s ports, empty shipping containers are “stacked six high,” the WSJ said, and empty semi-trailers stand idle.

“There are 16,000 registered truck drivers here but only 3,000 are working,” one driver at the port of Shenzhen told the WSJ.

Over the past three months, major shippers AP Moeller Maersk and Mediterranean Shipping Co. have scratched dozens of sailings, up to a third of their capacities, and docked 7 percent of their fleets, the WSJnoted.

During the COVID War’s consumption frenzy, shippers rented cargo ships from other carriers. Those shippers are now returning the vessels to their owners.

In December, China shipped 10 percent fewer goods abroad, year over year, marking the third straight month of decline and the biggest annual plunge since China shut down the city of Wuhan at the beginning of the COVID War.

If the global economy slides further, shipping rates could fall below shipping companies’ costs, which likely would spark a price war, the WSJ said.

“The collapse in demand we have seen over the last five months is leading to price wars, which nobody wants,” CEO Lars Jensen of consulting firm Vespucci Maritime, said in a WSJ interview.

However, “I believe [retailers’ inventories] will deplete in the second quarter and we’ll see some growth [in shipping demand] in the second quarter,” Soren Toft, CEO of the MSC shipping firm, told an industry conference last month.

“We still believe that globalization is here to stay, global trade will grow with more modest figures, and that’s good enough,” he said.

TREND FORECAST: One positive sign: manufacturing and exports in China rebounded in February, as we report in “China’s Economy Remains Strong in February” in this issue, indicating that retailers’ inventories are thinning out and shipping costs may tick up.

However, the reality is that the higher interest rates rise the deeper economies will sink… as will the shipping industry. And as with all of globalized life, the smalls will shrink out of business and the Bigs will get bigger.