The international shipping sector handles the vast bulk of global trade. There are about 50,000 merchant ships plying the oceans of the world, carrying every imaginable kind of cargo. That overall number may actually be falling, as smaller ships are scrapped. But they are being replaced with such leviathans as The Mary Maersk, so the overall capacity continues to rise.

Trade carried by sea has grown fourfold since 1970 and is still on the rise. The reason is simple, and it comes in the shape of a plain metal, easy to lift and swing onto a deck, box-shaped container. Putting goods in the estimated 20 million containers in the world, and sending them to all points by sea is far and away the cheapest way for businesses to transport products.

Did the 20-foot containers change the world economy?

Sea containers (known in the business as twenty-foot containers, shortened to TEU – 20-foot Equivalent Unit) transformed the economics of shipping, already a very inexpensive way to carry goods and materials, and utterly changed the shape of the world economy. In the last quarter of the 20th century this transport revolution singinifacntly diversified the consumers’ choice in almost any product category.

Pre-containers, transport costs could be up to 25% of the value of the item being shipped. Today those costs are down to just a few cents. There is no good financial reason not to send materials thousands of miles to be processed. Container shipping is, incidentally, by far the least environmentally damaging form of commercial transport.

Recent figures by the Swedish Network for Transport and the Environment estimate that airfreight in a Boeing 747 produces 540 g of CO2 per tonne over a kilometre. The figure for a heavy truck with trailer is 50 g. For a cargo vessel over 8000 t, it was 15 g.

How big is the international shipping industry?

Whichever set of figures you take, the size of world seaborne trade is massive. For example, in 2011 the 360 commercial ports of America imported $1.73 trillion worth of merchandise. That is 80 times the value of all American trade in 1960.

Some of the most comprehensive figures are for 2007, in a survey by IHS Global Insight published in 2009. In 2007 the equivalent of 141 million loaded twenty-foot containers were transported, amounting to over 7 billion tonnes of trade. (As well as container ships there are bulk carriers moving huge tonnages of materials such as iron ore, grain and coal, crude oil, chemicals and petroleum.)

IHS Global Insight, a global leader in economic and financial analysis and forecasting, estimated that merchant ships carried cargo amounting to about two-thirds of the value of total global trade. This accounts for more than $4 trillion worth of goods a year. It worked out that the merchant marine industry contributed $183.3 billion to world GDP. Capital expenditure was put at $ 29.4 bn. The industry created 4.2 million direct jobs. The full annual economic impact, including indirect and “induced effects” was put at $ 436.6 bn, with 13.5 million jobs relying on it.

Did the recession affect the shipping industry?

Bear in mind, however, that those were 2007, pre-Recession figures. They came after four frantic trading years. Since 2003 the surge in world trade had outstripped the number of ships capable of meeting demand.

Business has been down in the past few years, but the contraction, with overcapacity causing freight rates to fall to unprofitable levels for many carriers in 2013, may only be temporary. There are already strong signs that the international maritime economy is picking up. The jump in prices charged to freight goods around the world is a good indication that shipping firms perceive a big rise in demand for their services. In April (2014), the World Trade Organization forecast trade will grow by 4.7 percent this year, more than double the 2.1 percent rise of 2013.

Who are the merchant ships owned and manned by?

Merchant ships are registered in 150 nations, and manned by an estimated 1 million sailors, drawn from every almost every nation on earth. Most countries with a seaport have a fleet of sorts, but the biggest merchant ship ownership is concentrated in the hands of Greek, Japanese and German companies. Dominating their workforce are sailors from some of the poorest countries, the Philippines, Bangladesh and Indonesia.

Biggest of all in the container shipping sector is Maersk, with its fleet of 600 vessels and 117,000 employees. The other big players include Mediterranean Shipping Company (MSC), the French privately held CMA CGM Group, China’s COSCO Shipping and Korea’s Hanjin Shipping.

Great Britain’s mighty merchant fleet once dominated the markets of the world. Not any more. As recently as 1961 Britain had 142,462 working seafarers. Now that number is about 24,000.

America’s maritime decline has proceeded at a similar rate. In 1961 it owned 1,268 ships. Today there are fewer than 100 merchant ships flying the USA flag.

There is, however, another way to measure a nation’s mercantile might. London is now a major provider of professional services to the world shipping industry in the insurance, engineering, legal, banking and chartering sectors. This, possibly the world’s biggest concentration of maritime related companies, earns the UK economy an estimate of £1bn a year.

Why the number of merchant ships might be decreasing?

So how big our merchant ships, and how much bigger could they get? The number of container vessels afloat fell in the first half of 2014. If this trend continues it could make 2014 the first year since 1994 when the overall numbers went down. However the total TEU capacity of global merchant shipping is actually rising by about 6% a year.

This is happening because ships are getting bigger. The majority of the 230 merchant ships delivered in 2014 will have a capacity larger than 5,000 TEU. They will be much bigger than the 192 ships scrapped in the 12 months to the end of March 2014: their average capacity was 2,600 TEU.

And what of the future? it may be too early to say what the absolute upper limit of a container ship might be, as carriers strive to cut costs even further and gain a competitive edge, even supposing there were ports big enough to accommodate it. What is certain is that for the foreseeable future they will continue to get bigger. Analysts are openly talking about 24,000-TEU ships on the drawing board. The MM should enjoy its record while it can.