Shipping giant Maersk announced it’s cutting 10,000 jobs as it sees softening demand. And FedEx is telling some of its pilots to go fly for American Airlines as demand for its air cargo flights dips.

To explain what’s going on with shipping, we have to go back to the height of the pandemic, when we were ordering tons of stuff and there weren’t enough cargo ships, planes and trucks to carry it all. So shipping rates skyrocketed, and diesel was cheap.

It was “one of the most profitable periods in three decades,” said Dean Croke at DAT Freight and Analytics. “And carriers just flooded into the market.”

Established companies added lots of capacity too. But after Russia invaded Ukraine in early 2022, fuel prices shot up, Croke said, and consumers started spending more on services than goods.

“And then suddenly, people were left with expensive trucks, rates plummeting, high operating costs, and this sort of feeling of ‘whoa, like, whoa, hold on,'” Croke said.

The freight indusry has been in a recession ever since, said Zac Rogers, a professor of supply chain management at Colorado State University. Partly because, there’s still too much freight capacity, keeping shipping rates low. But that’s changing, with companies like Yellow going under, and others cutting back.

“As we see more capacity exit the market, it will even out demand for those who remain,” Roger said.

Plus, he said, there are signs companies are building up inventories again — which means more stuff to ship.