Had I told you three years ago that Danish shipping giant A.P. Moller-Maersk A/S would report $31 billion in 2022 operating profit and promise to return almost half of that to shareholders, you’d have called me crazy. It did. But the shipping industry’s Covid-era bonanza is over and the hangover looks grim. On Wednesday Maersk forecast its operating profit to decline to as little as $2 billion this year (or $5 billion if all goes well) as global consumers cut spending, causing shipping volumes and freight rates to decline. While Maersk is well-positioned to navigate the storm, its days as one of Europe’s most profitable companies are numbered. What sounds like catastrophe is really a return to normal. In the 2019 financial year preceding the pandemic Maersk reported $1.7 billion of operating profit. From a customer perspective, this normalization is surely a good thing. Advertisement During the interlude, exporters and importers were paying sky-high prices in a desperate attempt to secure space on ships, which generated a massive windfall for vessel operators. But in 2023 Maersk predicts container demand could contract as much as 2.5%, in part because retailers ordered too many goods during the pandemic and now have surplus inventory. Port congestion has eased, forcing fleet operators to idle ships. A nascent capacity overhang could worsen towards the end of this year when Maersk’s rivals start taking delivery of new vessels. It falls to new Chief Executive Officer Vincent Clerc to plot a course through the impending storm — predecessor Soren Skou stepped down at the start of January, timing the top of the market almost to perfection. Clerc’s first big decision — to disband a vessel-sharing alliance with Switzerland-based Mediterranean Shipping Co. from 2025 — is positive for those of us who think shipping companies are far too cosy and benefit from overly generous antitrust exemptions. Advertisement But it heralds even more competition on the high seas which won’t delight investors. The reshoring trend where industrial supply chains are relocated from Asia to Europe and the US is a further headwind. Maersk has tried to hedge itself against a shipping slowdown by shifting customers onto longer-term contracts and building out its land-based logistics activities via acquisitions. Neither is a panacea. Long-term contract rates are trending towards depressed short-term “spot” rates while Maersk’s less profitable logistics arm is feeling the same pressures from subdued demand. Maersk’s terminals business is now earning less from offering storage to customers affected by port congestion (which again is something clients won’t be unhappy about). One silver lining from the three years of pandemic chaos is that shipping companies have a much sounder financial footing: Maersk had $12.6 billion of net cash at the end of December, compared to net debt of almost $12 billion in 2019. Advertisement By maintaining its current fleet size and declining to splurge on new ships, Maersk has been far more conservative than some of its rivals. Even after returning $14 billion of cash to shareholders via dividends and buybacks in 2023 and pursuing further logistics and decarbonization investments its balance sheet will be in decent shape. Maersk will remain a vital cog in global supply chains but we won’t be talking about it quite so much. And maybe that’s a good thing. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a reporter for the Financial Times.