Container ships are cargo ship

Cargo ship

A cargo ship or freighter is any sort of ship or vessel that carries cargo, goods, and materials from one port to another. Thousands of cargo carriers ply the world's seas and oceans each year; they handle the bulk of international trade...

s that carry all of their load in truck-size intermodal container

Intermodal container

An intermodal container is a standardized reusable steel box used for the safe, efficient and secure storage and movement of materials and products within a global containerized intermodal freight transport system...

s, in a technique called containerization

Containerization

Containerization is a system of freight transport based on a range of steel intermodal containers...

. They form a common means of commercial intermodal freight transport

Intermodal freight transport

Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation , without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damages and...

.

History

There are two main types of dry cargo: bulk cargo

Bulk cargo

Bulk cargo is commodity cargo that is transported unpackaged in large quantities. This cargo is usually dropped or poured, with a spout or shovel bucket, as a liquid or as a mass of relatively small solids , into a bulk carrier ship's hold, railroad car, or tanker truck/trailer/semi-trailer body...

 and break bulk cargo

Break bulk cargo

In shipping, break bulk cargo or general cargo is a term that covers a great variety of goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of cargo are often called general cargo ships...

. Bulk cargoes, like grain or coal, are transported unpackaged in the hull of the ship, generally in large volume. Break-bulk cargoes, on the other hand, are transported in packages, and are generally manufactured goods. Before the advent of containerization in the 1950s, break-bulk items were loaded, lashed, unlashed and unloaded from the ship one piece at a time. However, by grouping cargo into containers, 1000 to 3000 cu ft (28.3 to 85 m3) of cargo, or up to about 64000 pounds (29,029.9 kg), is moved at once and each container is secured to the ship once in a standardized way. Containerization has increased the efficiency of moving traditional break-bulk cargoes significantly, reducing shipping time by 84% and costs by 35%. As of 2001, more than 90% of world trade in non-bulk goods is transported in ISO containers. In 2009, almost one quarter of the world's dry cargo was shipped by container, an estimated 125 million TEU or 1.19 billion metric tons worth of cargo.

Container vessels owe their existence to an American trucker by the name of Malcom McLean

Malcom McLean

Malcom Purcell McLean , born in Maxton, North Carolina, was an American entrepreneur, often called "the father of containerization"...

. In 1931, McLean purchased his first truck to send and pick up loads to and from vessels in various ports. During this time, while he used to wait impatiently for the truck’s contents to be loaded on to the ship he kept thinking of a more efficient and quick way to load and unload vessels and thus save enormous time and labor.

The earliest container ships were converted tanker

Tanker (ship)

A tanker is a ship designed to transport liquids in bulk. Major types of tankship include the oil tanker, the chemical tanker, and the liquefied natural gas carrier.-Background:...

s, built up from surplus T2 tanker

T2 tanker

The T2 tanker, or T2, was an oil tanker constructed and produced in large quantities in the United States during World War II. The largest "navy oilers" after the T3s at the time, nearly 500 of them were built between 1940 and the end of 1945....

s after World War II. In 1951 the first purpose-built container vessels began operating in Denmark

Denmark

Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...

, and between Seattle and Alaska

Alaska

Alaska is the largest state in the United States by area. It is situated in the northwest extremity of the North American continent, with Canada to the east, the Arctic Ocean to the north, and the Pacific Ocean to the west and south, with Russia further west across the Bering Strait...

. The first container ship in the United States was the Ideal X, a T2 tanker, owned by McLean, which carried 58 metal containers between Newark, New Jersey

Newark, New Jersey

Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...

 and Houston, Texas

Houston, Texas

Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...

 on its first voyage, in April 1956.

In 1955, McLean built his company, McLean Trucking into one of USA’s biggest freighter fleets. In 1955, he purchased the small Pan Atlantic Steamship Company from Waterman Steamship and adapted its ships to carry cargo in large uniform metal containers. On April 26, 1956, the first of these rebuilt container vessels, the Ideal X, left the Port Newark in New Jersey and a new revolution in modern shipping resulted.

Container vessels eliminate the individual hatches, holds and dividers of the traditional general cargo vessels. The hull of a typical container ship is a huge warehouse divided into cells by vertical guide rails. These cells are designed to hold cargo in pre-packed units – containers.

Shipping containers are usually made of steel, but other materials like aluminium, fibreglass or plywood are also used. They are designed to be entirely transferred to and from trains, trucks or trailers to and from a ship. There are several types of containers and they are categorised according to their size and functions.

Today, approximately 90% of non-bulk cargo

Bulk cargo

Bulk cargo is commodity cargo that is transported unpackaged in large quantities. This cargo is usually dropped or poured, with a spout or shovel bucket, as a liquid or as a mass of relatively small solids , into a bulk carrier ship's hold, railroad car, or tanker truck/trailer/semi-trailer body...

 worldwide is transported by container, and modern container ships can carry up to (Maersk E Class). As a class, container ships now rival crude oil tankers and bulk carrier

Bulk carrier

A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds. Since the first specialized bulk carrier was built in 1852, economic forces have fueled the development of these ships,...

s as the largest commercial vessels on the ocean.

Coming back to McLean’s invention, while it is a well established fact that containerization caused a revolution in the world of shipping its introduction did not have an easy passage. Shipping lines, railway (railroad in the US) companies and trade unions vehemently opposed and tried to block the use of containerised ships. It took ten years of legal battles before container ships would be pressed into international service. In 1966, a container liner service from USA to the Dutch city of Rotterdam commenced.

Containerization changed not only the face of shipping but it also revolutionised world trade as well. A container ship can be loaded and unloaded in a few hours compared to days in a traditional cargo vessel. This, besides cutting labor costs, has reduced shipping times between points to a great extent, for example it takes a few weeks instead of months for a consignment to be delivered from India to Europe and vice versa. It has also resulted in less breakage due to less handling and there is less danger of cargo shifting during a voyage. As containers are sealed and only open at the destination, pilferage and theft levels have been greatly reduced.

Exporters load (stuff) their merchandise in boxes that are provided by the shipping companies. They are then delivered to the docks by road, rail or a combination of both for loading on to container ships. Prior to containerization, huge gangs of men would spend hours fitting various items of cargo into different holds.

Cranes, installed either on the pier or on the ship, are used to place containers on board the ship. When the hull is loaded, additional containers are stacked on the deck.

Containerization has lowered shipping costs and decreased shipping time, and this has in turn helped the growth of international trade. Cargo that once arrived in cartons, crates, bales, barrels or bags now comes in factory sealed containers, with no indication to the human eye of their contents, except for a product code that machines can scan and computers trace. This system of tracking has been so exact that a two week voyage can be timed for arrival with an accuracy of under fifteen minutes.

It has resulted in such revolutions as on time guaranteed delivery and just in time manufacturing. Raw materials arrive in factories in sealed containers less than an hour before they are required in manufacture, resulting in reduced inventory costs.

Today's largest container ships measure almost 400 metres (1,312.3 ft) in length. They carry loads equal to the cargo carrying capacity of sixteen to seventeen pre WWII freighter ships.

Architecture

There are several key points in the design of modern container ships. The hull, similar to bulk carriers and general cargo ships, is built around a strong keel. Into this frame is set one or more below-deck cargo holds

Hold (ship)

thumb|right|120px|View of the hold of a container shipA ship's hold is a space for carrying cargo. Cargo in holds may be either packaged in crates, bales, etc., or unpackaged . Access to holds is by a large hatch at the top...

, numerous tanks, and the engine room. The holds are topped by hatch covers, onto which more containers can be stacked. Many container ships have cargo cranes installed on them, and some have specialized systems for securing containers on board.

The hull of a modern cargo ship is a complex arrangement of steel plates and strengthening beams. The hull is built around the keel. Resembling ribs, and fastened at right-angles to the keel are the ship's frames. The ship's main deck, the metal platework that covers the top of the hull framework, is supported by beams that are attached to the tops of the frames and run the full breadth of the ship. The beams not only support the deck, but along with the deck, frames, and transverse bulkheads, strengthen and reinforce the shell. Another feature of recent hulls is a set of double-bottom tanks, which provide a second watertight shell that runs most of the length of a ship. The double-bottoms generally hold liquids such as fuel oil, ballast water or fresh water.

A ship's engine room houses its main engines and auxiliary machinery such as the fresh water and sewage systems, electrical generators, fire pumps, and air conditioners. In most new ships, the engine room is located in the aft portion of the ship.

Size categories

Container ships are distinguished into seven major size categories: small feeder, feeder, feedermax, panamax

Panamax

Panamax and New Panamax are popular terms for the size limits for ships traveling through the Panama Canal. Formally, the limits and requirements are published by the Panama Canal Authority titled "Vessel Requirements"...

, post-panamax, new panamax and ultra-large.

The size of a panamax vessel is limited by the Panama canal's lock chambers

Panama Canal Locks

The Panama Canal Locks, which lift ships up 25.9 m to the main elevation of the Panama Canal, were one of the greatest engineering works ever to be undertaken at the time, eclipsed only by other parts of the canal project. No other concrete construction of comparable size was undertaken...

, which can accommodate ships with a beam of up to 32.31 m, a length overall of up to 294.13 m, and a draft of up to 12.04 m. The "post panamax" category has historically been used to describe ships with a moulded breadth over 32.31 m, however the Panama Canal expansion project is causing some changes in terminology. The "new panamax" category is based on the maximum vessel-size that will be able to transit a new third set of locks. The new locks are being built to accommodate a container ship with a length overall of 366 metres (1,200.8 ft), a maximum width of 49 metres (160.8 ft), and tropical fresh-water draft of 15.2 metres (49.9 ft). Such a vessel would be wide enough to carry 19 rows of containers, have a total capacity of approximately 12,000 TEU and be comparable in size to a capesize

Capesize

Capesize ships are cargo ships originally too large to transit the Suez Canal . To travel between oceans, such vessels used to have to pass either the Cape of Good Hope or Cape Horn. In effect Capesize reads as "unlimited"...

 bulk carrier or a suezmax

Suezmax

Suezmax is a naval architecture term for the largest ship measurements capable of transiting the Suez Canal, and is almost exclusively used in reference to tankers. Since the canal has no locks, the only serious limiting factors are draft , and height due to the Suez Canal Bridge...

 tanker.

Container ships under 3,000 TEU are generally called feeders. Feeders are small ships that typically operate between smaller container ports. Some feeders collect their cargo from small ports, drop it off at large ports for transshipment on larger ships, and distribute containers from the large port to smaller regional ports. This size of vessel is the most likely to carry cargo cranes onboard.

Container Ship Size Categories
Name	Capacity (TEU)	Example
Ultra Large Container Vessel (ULCV)	14,501 and higher	With a length of 397 m, a width of 56 m, draft of 15.5 m, and a capacity of over 15,000 TEU, ships of the Emma Maersk class are well over the limits of the New Panamax class. (Photo: The 15,000 TEU .)
New panamax	10,000–14,500	With a beam of 43 m, ships of the COSCO Guangzhou class are much too big to fit through the Panama Canal's old locks, but could easily fit through the new expansion. (Photo: The 9,500 TEU pierside in Hamburg. )
Post panamax	5,101–10,000
Panamax	3,001 – 5,100	Ships of the Bay-class are at the upper limit of the Panamax class, with an overall length of 292.15 m, beam of 32.2m, and maximum depth of 21.2 m. (Photo: The 4,224 TEU MV Providence Bay passing through the Panama Canal.)
Feedermax	2,001 – 3,000	Container ships under 3,000 TEU are typically called feeders, and are most likely to have cargo cranes. (Photo: The 384 TEU at anchor.)
Feeder	1,001 – 2,000
Small feeder	Up to 1,000

Cargo cranes

A major characteristic of a container ship is whether it has cranes installed for handling its cargo. Those that have cargo cranes are called geared and those that don't are called ungeared or gearless. The earliest purpose-built container ships in the 1970s were all gearless. Since then, the percentage of geared newbuilds has fluctuated widely, but has been decreasing overall, with only 7.5% of the container ship capacity in 2009 being equipped with cranes.

While geared container ships are more flexible in that they can visit ports that are not equipped with pierside cranes, they suffer from several drawbacks. To begin with, geared ships will cost more to purchase than a gearless ship. Geared ships also incur greater recurring expenses, such as maintenance and fuel costs. The United Nations Council on Trade and Development characterizes geared ships as a "niche market only appropriate for those ports where low cargo volumes do not justify investment in port cranes or where the public sector does not have the financial resources for such investment."

Instead of rotary cranes, some geared ships have gantry cranes installed. These cranes, specialized for container work, are able to roll forward and aft on rails. In addition to the additional capital expense and maintenance costs, these cranes generally load and discharge containers much more slowly than their shoreside counterparts.

The introduction and improvement of shoreside cranes have been a key to the success of the container ship. The first crane that was specifically designed for container work was built in California's Port of Alameda in 1959. By the 1980s, shoreside gantry cranes were capable of moving containers on a 3-minute-cycle, or up to 400 tons per hour. In March 2010, at Port Klang

Port Klang

Port Klang is a town and the main gateway by sea into Malaysia. Colonially known as Port Swettenham, it is also the location of the largest and busiest port in the country. As such, its economic progress has been greatly influenced by the port activities in its area...

 in Malaysia, a new world record was set when 734 container moves were made in a single hour. The record was achieved using 9 cranes to simultaneously load and unload the MV CSCL Pusan, a ship with a capacity of 9,600 TEU.

Vessels in the 1,500–2,499 TEU range are the most likely size class to have cranes, with more than 60% of this category being geared ships. Slightly less than a third of the very smallest ships (from 100–499 TEU) are geared, and almost no ships with a capacity of over 4,000 TEU are geared.

Cargo holds

Efficiency has always been key in the design of container ships. While containers may be carried on conventional break-bulk ships, cargo holds for dedicated container ships are specially constructed to speed loading and unloading, and to efficiently keep containers secure while at sea. A key aspect of container ship specialization is the design of the hatches, the openings from the main deck to the cargo holds. The hatch openings stretch the entire breadth of the cargo holds, and are surrounded by a raised steel structure known as the hatch coaming

Coaming

Coaming is any vertical surface on a ship designed to deflect or prevent entry of water. It usually refers to raised section of deck plating around an opening, such as a hatch...

. On top of the hatch coamings are the hatch covers. Until the 1950s, hatches were typically secured with wooden boards and tarpaulins held down with battens. Today, some hatch covers can be solid metal plates that are lifted on and off the ship by cranes, while others are articulated mechanisms that are opened and closed using powerful hydraulic rams.

Another key component of dedicated container-ship design is the use of cell guides. Cell guides are strong vertical structures constructed of metal installed into a ship's cargo holds. These structures guide containers into well-defined rows during the loading process and provide some support for containers against the ship's rolling at sea. So fundamental to container ship design are cell guides that organizations such as the United Nations Conference on Trade and Development

United Nations Conference on Trade and Development

The United Nations Conference on Trade and Development was established in 1964 as a permanent intergovernmental body. It is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues....

 use their presence to distinguishing dedicated container ships from general break-bulk cargo ships.

A system of three dimensions is used in cargo plans to describe the position of a container aboard the ship. The first coordinate is the row, which starts at the front of the ship and increases aft. The second coordinate is tier, with the first tier at the bottom of the cargo holds, the second tier on top of that, and so forth. The third coordinate is the slot. Slots on the starboard side are given odd numbers and those on the port side are given even numbers. The slots nearest the centerline are given low numbers, and the numbers increase for slots further from the centerline.

Lashing systems

Numerous systems are used to secure containers aboard ships, depending on factors such as the type of ship, the type of container, and the location of the container. Stowage inside the holds of fully cellular (FC) ships is simplest, typically using simple metal forms called container guides, locating cones, and anti-rack spacers to lock the containers together. Above-decks, without the extra support of the cell guides, more complicated equipment is used. Three types of systems are currently in wide use: lashing systems, locking systems, and buttress systems. Lashing systems secure containers to the ship using devices made from wire rope, rigid rods, or chains and devices to tension the lashings, such as turnbuckles. The effectiveness of lashings is increased by securing containers to each other, either by simple metal forms (such as stacking cones) or more complicated devices such as twist-lock stackers. A typical twist-lock is inserted into the casting hole of one container and rotated to hold it in place, then another container is lowered on top of it. The two containers are locked together by twisting the device's handle. A typical twist-lock is constructed of forged steel and ductile iron and has a shear strength of 48 metric tons.

The butress system, used on some large container ships, uses a system of large towers attached to the ship at both ends of each cargo hold. As the ship is loaded, a rigid, removable stacking frame is added, structurally securing each tier of containers together.

Fleet characteristics

Largest containership operators, 2010

Maersk Line – Denmark MSC – Switzerland CMA CGM Group – France Evergreen Line Evergreen Marine Evergreen Marine Corporation , headquartered in Luzhu, Taoyuan County, Taiwan in the Republic of China, is a containerized-freight shipping company, mainly serving the east coast of Asia and the west coast of North America, with over 150 container ships. It is part of the Evergreen Group...  – Taiwan APL American President Lines American President Lines Ltd. is the world's seventh-largest container transportation and shipping company, providing services to more than 140 countries through a network combining intermodal freight transport operations with IT and e-commerce...  – Singapore COSCO – China Hapag-Lloyd Group – Germany CSCL China Shipping Container Lines China Shipping Container Lines , a division of China Shipping Group , is a containerized marine shipping company, based in Shanghai, China....  – China Hanjin Hanjin Shipping Hanjin Shipping, Global Shipping & Logistics CompanyHanjin Shipping is Korea's largest and one of the world’s top ten container carriers that operates some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually...  -Rep. of Korea NYK – Japan

, container ships made up 13.3% of the world's fleet in terms of deadweight tonnage. The world's total of container ship deadweight tonnage has increased from in 1980 to in 2010. The combined deadweight tonnage of container ships and general cargo ships, which also often carry containers, represents 21.8% of the world's fleet.

, the average age of container ships worldwide was 10.6 years, making them the youngest general vessel type, followed by bulk carrier

Bulk carrier

A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds. Since the first specialized bulk carrier was built in 1852, economic forces have fueled the development of these ships,...

s at 16.6 years, oil tanker

Oil tanker

An oil tanker, also known as a petroleum tanker, is a merchant ship designed for the bulk transport of oil. There are two basic types of oil tankers: the crude tanker and the product tanker. Crude tankers move large quantities of unrefined crude oil from its point of extraction to refineries...

s at 17 years, general cargo ships at 24.6 years, and others at 25.3 years.

Most of the world's carrying capacity in fully cellular container ships is in the liner service

Cargo liner

A Cargo liner is a type of merchant ship which carried general cargo and often passengers. They became common just after the middle of the nineteenth century, and eventually gave way to container ships and other more specialized carriers in the latter half of the twentieth...

, where ships trade on scheduled routes. As of January 2010, the top 20 liner companies controlled 67.5% of the world's fully cellular container capacity, with 2,673 vessels of an average capacity of 3,774 TEU. The remaining fully 6,862 fully cellular ships have an average capacity of 709 TEU each.

The vast majority of the capacity of fully cellular containerships used in the liner trade is owned by German shipowners, with approximately 75% owned by Hamburg brokers. It is a common practice for the large container lines to supplement their own ships with chartered-in ships, for example in 2009, 48.9% of the tonnage of the top 20 liner companies was chartered-in in this manner.

Flag states

International law requires that every merchant ship be registered in a country, called its flag state

Flag State

The flag state of a commercial vessel is the state under whose laws the vessel is registered or licensed.The flag state has the authority and responsibility to enforce regulations over vessels registered under its flag, including those relating to inspection, certification, and issuance of safety...

. A ship's flag state exercises regulatory control over the vessel and is required to inspect it regularly, certify the ship's equipment and crew, and issue safety and pollution prevention documents. , the United States Bureau of Transportation Statistics

Bureau of Transportation Statistics

The Bureau of Transportation Statistics , as part of the United States Department of Transportation, compiles, analyzes, and makes accessible information on the nation's transportation systems; collects information on intermodal transportation and other areas as needed; and improves the quality and...

 count 2,837 container ships of or greater worldwide. Panama

Panama

Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...

 was the world's largest flag state

Flag State

The flag state of a commercial vessel is the state under whose laws the vessel is registered or licensed.The flag state has the authority and responsibility to enforce regulations over vessels registered under its flag, including those relating to inspection, certification, and issuance of safety...

 for container ships, with 541 of the vessels in its registry. Seven other flag states had more than 100 registered container ships: Liberia

Liberia

Liberia , officially the Republic of Liberia, is a country in West Africa. It is bordered by Sierra Leone on the west, Guinea on the north and Côte d'Ivoire on the east. Liberia's coastline is composed of mostly mangrove forests while the more sparsely populated inland consists of forests that open...

 (415), Germany

Germany

Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

 (248), Singapore

Singapore

Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

 (177), Cyprus

Cyprus

Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...

 (139), the Marshall Islands

Marshall Islands

The Republic of the Marshall Islands , , is a Micronesian nation of atolls and islands in the middle of the Pacific Ocean, just west of the International Date Line and just north of the Equator. As of July 2011 the population was 67,182...

 (118) and the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 (104). The Panamanian, Liberian, and Marshallese flags are open registries and considered by the International Transport Workers' Federation

International Transport Workers' Federation

The International Transport Workers' Federation is a global union federation of transport workers' trade unions, founded in 1896. In 2009 the ITF had 654 member organizations in 148 countries, representing a combined membership of 4.5 million workers....

 to be flags of convenience. By way of comparison, traditional maritime nations such as the United States and Japan only had 75 and 11 registered container ships, respectively.

Vessel purchases

In recent years, oversupply of container ship capacity has caused prices for new and used ships to fall. From 2008 to 2009, new container ship prices dropped by 19–33%, while prices for 10-year-old container ships dropped by 47–69%. In March 2010, the average price for a geared 500-ton container ship was $10 million, while gearless ships of 6,500 and 12,000 TEU averaged prices of $74 million and $105 million respectively. At the same time, secondhand prices for 10-year-old geared container ships of 500-, 2,500-, and 3,500-TEU capacity averaged prices of $4 million, $15 million, and $18 million respectively.

In 2009, 11,669,000 gross tons of newly built container ships were delivered. Over 85% of this new capacity was built in the Republic of Korea, China, and Japan, with Korea accounting for over 57% of the world's total alone. New container ships accounted for 15% of the total new tonnage that year, behind bulk carriers at 28.9% and oil tankers at 22.6%.

Scrapping

Most ships are removed from the fleet through a process known as scrapping

Ship breaking

Ship breaking or ship demolition is a type of ship disposal involving the breaking up of ships for scrap recycling. Most ships have a lifespan of a few decades before there is so much wear that refitting and repair becomes uneconomical. Ship breaking allows materials from the ship, especially...

. Scrapping is rare for ships under 18 years old and for those over 40 years in age. Ship-owners and buyers negotiate scrap prices based on factors such as the ship's empty weight (called light ton displacement or LTD) and prices in the scrap metal market. Scrapping rates are volatile, the price per light ton displacement has swung from a high of $650 per LTD in mid-2008 to $200 per LTD in early 2009, before building to $400 per LTD in March 2010. , over 96% of the world's scrapping activity takes place in China, India, Bangladesh, and Pakistan.

The global economic downturn of 2008–2009 resulted in more ships than usual being sold for scrap. In 2009, 364,300 TEU worth of container ship capacity was scrapped, up from 99,900 TEU in 2008. Container ships accounted for 22.6% of the total gross tonnage of ships scrapped that year. Despite the surge, the capacity removed from the fleet only accounted for 3% of the world's containership capacity. The average age of containerships scrapped in 2009 was 27.0 years.

Largest ships

Ten largest container ship classes, listed by TEU capacity

Twenty-foot equivalent unit

The twenty-foot equivalent unit is an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals...

Built	Name	Class size	Maximum TEU Twenty-foot equivalent unit The twenty-foot equivalent unit is an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals...	Sources
2006	Emma Mærsk Emma Mærsk Emma Mærsk is the first container ship in the E-class of eight owned by the A. P. Moller-Maersk Group. When she was launched in 2006, Emma Mærsk was the largest container ship ever built...	8	15,200–15,550
2009	MSC Danit MSC Danit MSC Danit is a large container ship. The ship was ordered by Mediterranean Shipping Company S.A. and finished at the beginning of March 2009. The ship was built in Daewoo Shipbuilding & Marine Engineering Ltd, South Korea under yard number 4135, for Dordellas Finance Corp., Panama.- Design :MSC...	7	14,000
2009	MSC Beatrice MSC Beatrice MSC Beatrice is a container ship with the second largest capacity in the world. She has a maximum capacity of 13,798 twenty-foot equivalent unit , or 10,500 TEU and is 366 meters long. Because of her size the deckhouse was moved forward...	7	14,000
2008	CMA CGM Thalassa CMA CGM Thalassa CMA CGM Thalassa is a container ship owned by Global Ship Lease and on long-term charter to the shipping line - CMA CGM. The ship delivered to the ship-operator on 30 December 2008...	2	10,960
2005	Gudrun Mærsk Gudrun Mærsk The Gudrun Maersk is a very large container ship, capable of carrying 8,500 TEU and with a deadweight of 115,700 metric tons. The ship was built in 2005 and is operated by the Maersk Line.- Design :...	6	10,150
2002	Clementine Maersk Clementine Maersk Clementine Maersk is a container ship property of the largest company for maritime transport and logistics in the world - Maersk Line. The ship was built in 2002 in the ship-yard of Odense Steel. The container ship is large and has capacity for 6,600 TEUs according to company statistics and...	7	9,600
2006	COSCO Guangzhou COSCO Guangzhou COSCO Guangzhou is a container ship, and one of the largest currently in service. She was built for Cosco Ship Management in 2006 at the company's shipyards. The ship has capacity for 9,500 TEU and mostly sails between the ports in China, India and Japan and those in Western Europe and the United...	5	9,500
2006	CMA CGM Medea CMA CGM Medea CMA CGM Medea is a container ship, and among the largest in the world, though she can carry four thousand fewer containers than the largest, Emma Mærsk. The CMA CGM Medea was built in 2006.- Design :...	4	9,415
2003	Axel Mærsk Axel Mærsk The Axel Maersk is a Danish merchant ship. The container ship is part of the fleet of the Maersk Line. The container ship has a length of and a beam of...	6	9,310
2006	NYK Vega NYK Vega NYK Vega is a container ship, one of the largest in the world, operated by Nippon Yusen Ship Management. The vessel has a capacity of 8,600 containers in company calculations and 9,012 TEU in IMO calculations...	3	9,200

Economies of scale have dictated an upward trend in sizes of container ships in order to reduce costs. However, there are certain limitations to the size of container ships. Primarily, these are the availability of sufficiently large main engines and the availability of a sufficient number of ports and terminals prepared and equipped to handle ultra-large container ships. Furthermore, the permissible maximum ship dimensions in some of the world's main waterways could present an upper limit in terms of vessel growth. This primarily concerns the Suez Canal

Suez Canal

The Suez Canal , also known by the nickname "The Highway to India", is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea and the Red Sea. Opened in November 1869 after 10 years of construction work, it allows water transportation between Europe and Asia without navigation...

 and the Singapore Strait

Singapore Strait

The Singapore Strait is a 105-kilometer long, 16-kilometer wide strait between the Strait of Malacca in the west and the South China Sea in the east. Singapore is on the north of the channel and the Riau Islands are on the south...

.

In 2008 the South Korean shipbuilder STX

STX Corporation

STX Corporation is a South Korean holding company engaged in the provision of trading services. Headquartered in Gyeongsangnamdo, South Korea, the company operates its business through two divisions: trade and ship maintenance. Its trade business division provides shipping and energy materials,...

 announced plans to construct a container ship capable of carrying , and with a proposed length of 450 metres and a beam

Beam (nautical)

The beam of a ship is its width at the widest point. Generally speaking, the wider the beam of a ship , the more initial stability it has, at expense of reserve stability in the event of a capsize, where more energy is required to right the vessel from its inverted position...

 of 60 metres. If constructed, the container ship would become the largest seagoing vessel in the world.

Since even very large container ships are vessels with relatively low draft compared to large tankers and bulk carriers, there is still considerable room for vessel growth. Compared to today's largest container ships, Maersk Line's Emma Mærsk

Emma Mærsk

Emma Mærsk is the first container ship in the E-class of eight owned by the A. P. Moller-Maersk Group. When she was launched in 2006, Emma Mærsk was the largest container ship ever built...

-type series, a container ship would only be moderately larger in terms of exterior dimensions. According to a 2011 estimate, an ultra-large container ship of would measure 440m x 59m, compared to 397.71 x 56.40m for the Emma Mærsk class. It would have an estimated deadweight of circa 220,000 tons. While such a vessel might be near the upper limit for a Suez Canal passage, the so-called Malaccamax

Malaccamax

Malaccamax is a naval architecture term for the largest size of ship capable of fitting through the -deep Strait of Malacca. Because the Sunda Strait is even shallower at minimum depth, a post-Malaccamax ship would need to use even longer alternate routes such as:*Lombok Strait, Makassar Strait,...

 concept (for Straits of Malacca) does not apply for container ships, since the Malacca and Singapore Straits' draft limit of about 21 metres is still above that of any conceivable container ship design. In 2011, Maersk announced plans to build a new "Triple E" family of containerships with a capacity of 18,000TEU, with an emphasis on lower fuel consumption.

In the present market situation, main engines will not be as much of a limiting factor for vessel growth either. The steadily rising cost of fuel oil

Fuel oil

Fuel oil is a fraction obtained from petroleum distillation, either as a distillate or a residue. Broadly speaking, fuel oil is any liquid petroleum product that is burned in a furnace or boiler for the generation of heat or used in an engine for the generation of power, except oils having a flash...

 has prompted most container lines to adapt a slower, more economical voyage speed of about 21 knots, compared to earlier top speeds of 25 or more knots. Subsequently, new-built container ships can be fitted with a smaller main engine. Engine types fitted to today's ships of are thus sufficiently large to propel future vessels of or more. Maersk Line, the world's largest container shipping line, nevertheless opted for twin engines (two smaller engines working two separate propellers), when ordering a series of ten 18,000 TEU vessels from Daewoo Shipbuilding in February 2011. The ships will be delivered between 2013 and 2014.

Freight market

The act of hiring a ship to carry cargo is called chartering. Outside of special bulk cargo

Bulk cargo

Bulk cargo is commodity cargo that is transported unpackaged in large quantities. This cargo is usually dropped or poured, with a spout or shovel bucket, as a liquid or as a mass of relatively small solids , into a bulk carrier ship's hold, railroad car, or tanker truck/trailer/semi-trailer body...

 markets, ships are hired by three types of charter agreements: the voyage charter, the time charter

Time Charter

Time Charter was an Irish-bred, British-trained thoroughbred racehorse who won several important races between 1982 and 1984.-Background:...

, and the bareboat charter

Bareboat charter

A bareboat charter is an arrangement for the chartering or hiring of a ship or boat, whereby no crew or provisions are included as part of the agreement; instead, the people who rent the vessel from the owner are responsible for taking care of such things....

. In a voyage charter, the charterer rents the vessel from the loading port to the discharge port. In a time charter, the vessel is hired for a set period of time, to perform voyages as the charterer directs. In a bareboat charter, the charterer acts as the ship's operator and manager, taking on responsibilities such as providing the crew and maintaining the vessel. The completed chartering contract is known as a charter party

Charter Party

The Charter Party of Cincinnati, Ohio, United States, is a minor political party. The party is Cincinnati's third party. Members of this party are called "Charterites."-History:...

.

The United Nations Conference on Trade and Development

United Nations Conference on Trade and Development

The United Nations Conference on Trade and Development was established in 1964 as a permanent intergovernmental body. It is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues....

, or UNCTAD, in its 2010 Review of Maritime Trade tracks two aspects of container shipping prices. The first is a chartering price, specifically the price to time-charter a 1 TEU slot for a 14 metric ton cargo on a container ship. The other is the freight rate

Freight rate

A freight rate is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport , the weight of the cargo, and the distance to the delivery destination...

, or comprehensive daily cost to deliver one-TEU worth of cargo on a give route. As a result of the late-2000s recession, both indicators showed sharp drops during 2008–2009, and have shown signs of stabilization since 2010.
UNCTAD uses the Hamburg Shipbrokers’ Association (formally the Vereinigung Hamburger Schiffsmakler und Schiffsagenten e. V. or VHSS for short) as its main industry source for container ship freight prices. The VHSS maintains a few indices of container ship charter prices. The oldest, which dates back to 1998, is called the Hamburg Index. This index considers time-charters on fully cellular containerships controlled by Hamburg brokers. It is limited to charters of 3 months or more, and presented as the average daily cost in U.S. dollars for a one-TEU slot with a weight of 14 metric tons. The Hamburg Index data is divided into ten categories based primarily on vessel carrying capacity. Two additional categories exist for small vessels of under 500 TEU that carry their own cargo cranes. In 2007, VHSS started another index, the New ConTex which tracks similar data obtained from an international group of shipbrokers.

The Hamburg Index index shows some clear trends in recent chartering markets. First, rates were generally increasing from 2000 to 2005. From 2005 to 2008, rates slowly decreased, and in mid-2008 began a "dramatic decline" of approximately 75%, which lasted until rates stabilized in April 2009. Rates have ranged from $2.70 to $35.40 in this period, with prices generally lower on larger ships. The most resilient sized vessel in this time period were those from 200–300 TEU, a fact that the United Nations Council on Trade and Development attributes to lack of competition in this sector. Overall, in 2010, these rates rebounded somewhat, but remained at approximately half of their 2008 values. As of 2011, the index shows signs of recovery for container shipping, and combined with increases in global capacity, indicates a positive outlook for the sector in the near future.

Recent liner freight rates (in 1000 US$/TEU)
From	To	2008				2009
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Asia	U.S.	1.8	1.8	1.9	1.9	1.7	1.4	1.2	1.3
U.S.	Asia	0.8	1.0	1.2	1.2	0.9	0.8	0.8	0.9
Europe	Asia	1.0	1.1	1.1	1.1	0.9	0.7	0.8	0.9
Asia	Europe	2.0	1.9	1.8	1.6	1.0	0.9	1.0	1.4
U.S.	Europe	1.3	1.4	1.6	1.7	1.5	1.4	1.4	1.5
Europe	U.S.	1.6	1.6	1.6	1.6	1.3	1.2	1.1	1.3