Cargo Shipping 101: Goods moved by ships

View of container yard with sunset background

What is cargo shipping? Simply, it is the transport of goods by specialised ships across the world – something which has become even more vital to the stability of the global economy since the outbreak of the COVID-19 pandemic.

There are numerous types of ships that carry many types of cargo such as oil, scrap metals, white-goods, iron ore, diesel and petrol, food and drink, electrical and electronics equipment, raw materials for manufacturing and commodity bulk cargo such as coffee.

The majority of consumer goods are carried by container ships in 20-foot long containers, known as twenty foot equivalent units (TEU). The largest vessels commissioned in 2019/2020 can carry up to 23,000 TEU and these are deployed predominantly on the most profitable China-US Pacific routes.

The COVID-19 pandemic has caused major fluctuations in trade across the world, and this affected container shipping and carriers. Profits have improved substantially, in some cases by record margins, as consumer demand has boomed, coinciding with high freight rates and low bunkering prices.

Container shipping lines became global news in March 2021 when the Suez Canal was obstructed by the grounded Ever Given, a 19,000 TEU vessel. More than 300 vessels carrying all types of cargo were held at anchor and many more chose to divert around the Cape of Good Hope, South Africa.

With these two crises, the importance of cargo shipping and the supply chains they support have never been so important.

Learn more about containers by reading the shipping container 101 guide on ocean freight and cargo.

Types of cargo 

Refrigerated (reefer) containers carry food and perishable items. Carriers have substantially increased their reefer container capacity in recent years as perishable items, such fruits and vegetables, to meet growing consumer demands in major markets.

Consequently, port development has accelerated in regions that export those goods, including West Africa and Central America.

These special dehumidified containers ensure a temperature range from -35 degrees to up to +30 degrees when the ambient temperature is up to 50 degrees.

Ships can also carry rare and precious items and hazardous chemicals. The transportation of such goods came under scrutiny in 2020 when a cargo of chemical goods exploded at the Port of Beirut, Lebanon.

The London-based Baltic Exchange provides a Baltic Dry Index (BDI) that offers information on the price of moving raw materials or cargo by sea.

When discussing the trade of different goods in the market, cargo type breaks down into dry cargo, hazardous cargo, reefer cargo and over-sized cargo.

By industry, the market segments into food and beverages, chemical, manufacturing, oil and gas, and white-goods.

North America is a prominent cargo shipping market in the world, with the US the largest market in the region.

Canada and Mexico are other major markets in North America. Europe is one of the largest cargo shipping market in the world. Germany, Italy, France, Spain, the UK, Belgium, Sweden and Netherlands are major markets in Europe.

Asia Pacific is one of the largest cargo shipping market in the world.

China, one of the largest exporters in the world, is the largest market for cargo shipping in the Asia Pacific region.

Japan, India, South Korea and Australia are other major markets in Asia Pacific.

Middle East and Africa is a significant cargo shipping market led by Iran, Saudi Arabia, Turkey and South Africa.

Latin America is another major cargo shipping market led by Brazil and Argentina.

Brazil is the largest market in the region.

Rising imports of soybeans, coal and iron ore to China from Australia, Brazil, have not increased the shipping rates and increased the demand for cargo shipping.

Due to increase in new shipping vessels, shipping prices of commodities have not increased.

Growth in foreign trade agreements such as NAFTA (North Atlantic Free Trade Agreement), TPSEP (Trans-Pacific Strategic Economic Partnership) and AFTA (ASEAN Free Trade Area), is increasing the demand of cargo shipping market.

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