May 8, 2024
Container ships are the backbone of the global economy and modern logistics. Without them, it would be impossible to think of an interconnected world as that in which we live. To put this into perspective, consider that 90% of the world’s total cargo is transported by sea and 60% of such goods make their way across the ocean in a container ship. Simply put, broad-reaching and affordable trade would be impossible in a world without container vessels, making it vital to understand them in depth.
What is a container ship?
Container ships are commercial vessels which are intended to transport large amounts of cargo safely and efficiently across long distances. Crucially, all cargo in a container ship is stored in metal shipping containers that can easily be transferred from land transportation like trains and trucks, to the hull of the vessel. These ships require special ports given their considerable magnitude as well as the need of large cranes to load and unload containers in the first place.
Despite their modern prevalence, shipping containers are a relatively recent phenomenon. The first ever ship of this time was the Ideal-X which in 1956, departed from the Port of Newark to the Port of Houston carrying 58 metallic containers. The ship was actually a byproduct of the containers it carries. US entrepreneur Malcolm McLean wanted to create a more efficient system to transport goods across large voyages and designed the multimodal shipping container as a solution, allowing to easily transfer cargo from land transportation to ships. The container ship followed as a necessity to transport the containers McLean originally envisioned.
“Container ships are commercial vessels which are intended to transport large amounts of cargo safely and efficiently across long distances”.
What is the purpose of container ship?
Container ships are meant to transport cargo efficiently across ports. They are owned by transportation companies that use them to safely carry goods throughout the ocean. Companies themselves don’t own the ships or even the containers they carry but instead buy space in a ship to transport their goods. Their purpose is just to take the goods of a company from one port to another. At times, they might be essential to a company’s operations if its supply chain covers various countries—more so with the recent trend towards nearshoring.
Therefore, container ships serve a key role in trade and, by extension, in the global economy, caring billions of tons of goods every year—just in 2021, global maritime cargo was estimated in 11 bn tonnes of goods. As such, it is no surprise that Clarksons Research estimated in 2023 that the total value of the global container ship fleet was of $1.4T. Although data has changed over time, in 2017 it was the case that the top 5 shipping companies in the world represented 35.76% of the entire global fleet of container ships. By 2020, that number had decreased to 20.7%, although the top 5 companies controlled 63.6% of all TEU capacity (a common metric for containers)—signaling they have less ships in their fleets with larger capacities.
Size of Container Ship Fleets for the Largest Transportation Companies
(Source: Alphaliner)
How big are container ships?
The size of container ships has varied significantly over time and has been mostly tied to physical limitations. To start, it is worth considering how one could measure ships themselves. The size of container ships is better understood by looking at the amount of containers it can carry at a time. For this, experts use a metric called a Twenty-Foot Equivalent Unit or TEU, which represents the volume of a single multimodal container 20 ft in length. Thus, a ship with a capacity of 1,000 TEUs, for instance, would be able to carry 1,000 containers 20 ft in length.
The earliest container ships were able to carry between 500 and 800 TEUs, limited by the lack of interest in containerized trade and absence of technology. Then, as companies began to notice the large potential in vessels of this type, they developed larger ships reaching a natural constraint in the size of the Panama Canal—a crucial artery for global trade connecting the Pacific and Atlantic oceans. In the shiping industry, the length of the Panama Canal locks—roughly 110 ft in width—then became a means to categorize ships based on their ability to use the canal or not. The limits set by the original Panama Canal dimensions came to be known as “Panamax” and were able to carry between 3,000 and 4,500 TEUs. Post-Panamax ships were those built beyond the capabilities of the Canal, reaching new scales in the early 2000s as companies developed container ships capable of carrying between 11,000 and 15,000 TEUs, known as VLCS: Very Large Container Ships. These would become the biggest container ships of their time. In 2016, the Panama canal opened an expansion that allowed vessels of up to 12,500 TEUs to make the crossing giving such ships the name of Neo-Panamax in honor of the old Panamax limit. Now, companies have gone even further, with container ships capable of carrying between 18,000 and 21,000 TEUs known as an Ultra Large Container Ship (ULC) or Ultra Large Container Vessel. Today, the largest container ship in the world, the MSC Irina, can carry 24,346 TEUs at a time.
“The size of container ships has varied significantly over time and has been mostly tied to physical limitations”
Looking at it from a tonnage perspective, we can see that the increase in TEUs drastically expanded the overall historical capacity of the average container ship. In the 1980s, for instance, the average container ship was only able to carry 11 million dead weight tonns (dwt). By 2022, that number had skyrocketed to 293 dwt thanks, in great part, to the expansion in shipping capacity.
Average Capacity of Container Ships Over Time (in millions of DWT)
(Data from Statista)
Yet despite the race to build bigger and larger ships, these are not the bulk of the global fleet. In reality, smaller shipping containers more in line with the original Panamax limit seem to be the most common. As of 2016, for instance, Statista estimated that the bulk of all container ships—some 70.2%—had a capacity between 500 and 6,000 TEUs, whereas Ultra Large Container Ships, and Very Large Container Ships represented just 7.6% of the total. Thus, on average, we can say that the most common container ships are carrying between 500 and 6,000 intermodal containers. That is why the overall deadweight tonnage of ships has grown at a steady pace since 2015 instead of growing as rapidly as the capacity of TEUs in some ships. Cargo companies have preferred smaller and reliable vessels that can still fit in the Panama Canal.
Number of Container Ships by TEU Capacity (as of 2016)
(Data from Statista)
“On average, the most common container ships are carrying between 500 and 6,000 multimodal containers”
How fast do container ships travel?
The speed of a container ship varies depending on the amount of cargo, weather conditions, and the ultimate design of each vessel. No two boats are the same nor do they carry identical cargos, so their speeds will also be different. On average, we know that container ships travel at a speed of 14.2 nautical miles per hour. Nautical miles are a unit of measurement exclusive to maritime transportation that dates back to early forms of sea travel. Roughly, one nautical mile equals 1.85 km or 1.15 miles, making the average speed of a container ship some 26.3 kilometers per hour or 16.34 miles per hour.
The speed of these vessels might seem relatively slow when compared to ground transportation, but it is worth noting that they are carrying hundreds of millions of tonnes in cargo every trip. Moreover, when compared to other cargo ships such as oil tankers or gas carriers, container ships prove to be far superior in terms of speed. To put this into perspective, while a container ship travels at an average speed of 14.2 nautical miles per hour, a general cargo ship travels at 9.25 nautical miles per hour.
“On average, we know that container ships travel at a speed of 14.2 nautical miles per hour”.
So, why are container ships important?
In recent history, container ships have become crucial to the global economy. Through them, companies can carry billions of goods every year worth trillions of dollars. Their very existence allows for trade between countries to be done in a safe and efficient manner. Their importance is in all the products countries import and export on a day to day basis and will likely remain that way in years to come.
