December 2 , 2021
11 mins read

Things You Didn’t Know About the Shipping Business

Punit Chotia
Punit Chotia
Things You Didn’t Know About the Shipping Business
Things You Didn’t Know About the Shipping Business
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Shipping involves the movement of cargo or goods from one place to another. The process only sounds simple, but in reality, there are many things that a shipping company does behind the scenes. That’s why it is a huge industry with diverse activities.

The logistics industry has been the backbone of economies since trade started as a practice in the world. Did you know shipping accounts for 90% of the world’s trade? This is what makes running a shipping company so lucrative!

In 2020, the global shipping industry was worth $6.41 billion, which is expected to expand at a compound annual growth rate of 12% till 2028. Analysts expect the shipping industry to reach $15.83 billion by 2028.

You can now understand the vast opportunities the shipping business will unfold going further. Due to digitalization, many a shipping company has started taking their business online – through transport apps like Vahak!

India - The emerging global hub for shipping

India has a vast number of opportunities in the shipping sector. Interestingly, the government is planning to invest $82 billion towards 400 port projects by 2035. This gives an understanding of how much the shipping industry will contribute to the country’s growth.

Globalization has opened up a vast scope of development for traditional shipping businesses, which are primarily unorganized. If you own a shipping company, this is the right time to find your clients online easily. Transport apps such as Vahak revolutionize the logistics industry by using technology to solve the sector's issues!

Technology - The way forward

Technology has come at the forefront of every industry in the country today. For traditional logistics and shipping companies, it is important to switch to the online model to attract more clients and improve the performance of their businesses.

Further, the digitalization of supply chains will expand the scope of transportation while also optimizing current infrastructure. Companies can improve their supply chains and make them more flexible with better visibility into inventory status and transport patterns. Intermodal transportation, linkages to the remote areas, and port-centric logistics are crucial from an end-to-end supply chain perspective.

After COVID-19, the Internet of Clean will be the new standard for warehouses, bunkers, and ports. In the next 15 years, huge container ships capable of holding more container units are scheduled to be built.

The use of blockchain to track transportation conditions will aid in maintaining expected temperature and humidity ranges. With the temperature-controlled Internet of Lights, advancements in cold-chain systems are gaining traction (ambient outside temperature-based optimization).

Continuous monitoring and predictive analytics for assessing total reefer cargo health, as well as real-time notifications, help increase shipping efficiency and reliability while saving money.

By employing the right technology, any shipping company will be able to make it big in today’s digital world!

What does cargo mean?

Cargo is nothing but goods transported by a shipping company through different modes of transport such as railways, airways, and waterways. Cargo can be anything from electronics, medicines, clothes, liquid products to automobiles, etc.

Cargo containers are huge boxes in which goods gets shipped. Empty containers are categorized as cargo as well, as they get shipped from one location to another. Did you know that the shipping industry faced a shortage of cargo containers due to heavy demand after the COVID-19 pandemic restrictions started easing globally?

Reports suggest that in 2021, all the key ports in India have handled 673 million tonnes of cargo traffic. Further, the country’s merchandise exports touched $291 billion during 2020-21. With the increase in investment and cargo traffic, the country’s port sector is expected to witness further growth.

How is cargo loaded and unloaded?

A shipping company’s business model is derived from doing cargo logistics. Cargo loading involves boarding the cargo on the ship to transport it from one port to another. On the other hand, cargo unloading involves offloading it from the vessel at the destination port. The cargo or consignment is handed over to the port authority when it reaches the destination port.

Procedure for cargo loading and unloading is as follows:

  • First, cargo is appropriately packed. Improper packaging can cause damage during transit. This is why finding a good shipping company is important.
  • The crew members handling the cargo must know how to use machines to lift the load into the ship.
  • At night, the ship deck must have proper lighting to carry on the process of cargo loading and unloading.
  • The container ships need to have twist locks to secure the cargo.
  • Any faulty equipment gets checked in the ship, which is duly replaced.
  • All the exhaust fans in the containers should be switched on to prevent any hazardous gas during the process.

Since loading and unloading cargo is a hazardous activity, the shipping company must ensure that safety precautions such as wearing PPE kits, helmets, goggles, and boiler suits are taken.

There have been many accidents due to improper handling of cargo, which has resulted in the loss of revenue, fall in reputation of the shipping company, and loss of lives of cargo loaders.

Major cargo ships in the world

The idea for building container ships first came in 1956. The oceans across the world are carrying over 50,000 ships currently.

Cargo ships are large ships used to carry the consignments in containers from one place to another. The capacity size of these ships is another parameter that helps differentiate between the ships.

Some categories include small ships, Panamax, new Panamax, and large container vessels, among others.

Based on the cargo vehicle’s capacity, the largest cargo ships in the world are:

  • Algeciras class of ships

Developed by a South Korean shipping company in 2020, the Algeciras class of ships has a capacity of 24,000 twenty-foot equivalent units (a unit to measure container volumes), making it the largest container ship globally. As far as technology is concerned, this ship is one of the best technologically equipped ships in the world.

  • Oslo class of ships

The ship is similar to the Algeciras class and was built by the shipbuilding company Samsung Heavy Industries Co. Ltd. in 2020. It is the second-largest cargo ship on earth. It has a carrying capacity of over 23,700 twenty-foot equivalent units.

  • MSC Gulsun

This cargo ship was also built by Samsung Heavy Industries Co. Ltd. and had a cargo-carrying capacity of 23,756 twenty-foot equivalent units. The Mediterranean Shipping Company S.A. (MSC) is the ship operator.

  • MSC Mina

The Mediterranean Shipping Company S.A. also operates this ship. The vessel has a carrying capacity of over 23,600 twenty-foot equivalent units. The length of the ship is around 400 meters, and its width is 61 meters.

  • Jacques Saade Container Ship

The Jacques Saade ship was built by China State Shipbuilding Corporation and is one of the world’s largest cargo ships. The ship uses liquefied natural gas. The ship can carry cargo up to 23,000 twenty-foot equivalent units of capacity.

  • Orient Overseas Container Line Hong Kong

Built by Samsung Heavy Industries Co. Ltd., the cargo ship has a carrying capacity of over 21,400 twenty-foot equivalent units. It is one of the largest container ships, with a length of 399.87 meters.

Leading cargo shippers of the world

Owing to a large global cargo shipping industry, the sector houses many cargo shipping companies.

In terms of scale and operations, the leading cargo shippers of the world include:

  1. APM-Maersk

This Denmark-based shipping company was started in 1904 and develops the best fleet of cargo ships. The shipping company operates about 705 cargo ships with a capacity of around 4,097,480 twenty-foot equivalent units.

2. MSC – Mediterranean Shipping Company

In 1970, the Switzerland-based shipping company operated over 550 cargo ships with a twenty-foot equivalent units capacity of 3,860,000.

3. China Ocean Shipping Company Ltd.

COSCO has a presence in over 40 countries and has 500 cargo ships with a capacity of 3,022,882 twenty-foot equivalent units. It is one of the largest cargo shipping companies in the world and is widely known.

4. CMA-CGM

CMA-CGM is a leading cargo shipping company based out of France. This shipping company started in 1978 as a merger between different shipping companies.

The company operates over 560 cargo ships in over 150 routes globally, having a capacity of around 30,15,200 twenty-foot equivalent units.

5. Hapag-Lloyd

The Hapag-Lloyd shipping company was started due to a merger between Hamburg-American Line and Lloyd in 1970. The shipping company owns over 235 having a capacity of about 17,24,565 twenty-foot equivalent units.

Leading cargo companies in India

India is a major global trade hub and houses many leading cargo companies that facilitate cargo movement from one place to another.

The companies are:

1. Cochin Shipyard

The Kerala-based shipping company is among the top 10 shipping companies in the country. Cochin Shipyard’s products include tankers, bulk carriers, platform supply vessels, among others.

2. Essar Shipping

Started in 1945, the Mumbai-based shipping company is a part of the Essar Group. The company provides integrated logistics services and also includes sea transportation and oilfields services.

3. Gujarat Pipavav Port

Started in 1996, this shipping company offered different services such as logistic support and cargo handling, etc.

4. The Shipping Corporation of India

State-owned, The Shipping Corporation of India was started in 1961. The Mumbai-based shipping company is one of the largest cargo companies and offers liner and passenger services, tanker services, bulk carrier, and offshore services. This shipping company also manages different cargo ships at the global level.

Among other leading cargo companies of India, Blue Dart Express, Aegis Logistics, AllCargo Logistics, and others provide cargo solutions in India and globally.

Major cargo ports of India

The world's major shipping routes are connected via India, and accordingly, the country has significant ports that can easily handle the cargo. It has the Bay of Bengal, Indian Ocean, and the Arabian Sea on three sides.

The government owns a majority of the ports in the country. Among private companies, Reliance Industries and the Adani Group operate a few ports as well.

Leading ports in the country are:

  1. Jawaharlal Nehru Port Trust

This port is located in Navi Mumbai on the Arabian Sea. Being the largest container port of India, it handles about 55% of the country’s cargo transported through seaways. The Government of India owns and operates the port.

2. Mundra Port

The port is located in the Kutch district in Gujarat. It is one of the largest privately-held ports in the country. Started in 1998, Mundra Port is owned and operated by Adani Ports and Special Economic Zone. In 2020-21, the port handled over 144 million tonnes of cargo.

3. Port of Chennai

The port was formerly known as Madras Port and is the second-largest port after the Jawaharlal Nehru Port in Navi Mumbai. It is located in the Bay of Bengal and handles over 60 million tonnes of cargo.

4. Syama Prasad Mookerjee Port Trust, Kolkata

This port is the oldest in the country and was started by the British East India Company. It majorly exports iron ore, leather, and cotton textiles and handles imports of items such as wheat, cotton, machinery, iron, and steel.

Other major ports in the country include Port of Kandla, V. O. Chidambaranar Port, Vishakapatnam Port, Cochin Port, and Hazira Port. These ports play a crucial part in facilitating the economic activities of the country.

How big is a cargo vessel?

A cargo vessel is designed to keep in view the larger volumes of cargo that have to be transported to different places.

A cargo vessel weighing 220,000 tons deadweight would be about 440 meters in length and 59 meters in width. This ship would be able to handle the capacity of up to 23,756 twenty-foot equivalent units. The ships have an average weight of 100,000 tons deadweight.

How much cargo can a cargo ship carry?

The cargo ships are designed to carry specific capacities of cargo from one place to another. Ranging from small accommodations to large capacities, they are designed to load cargo and take them to their respective destinations.

The capacity of cargo ships is measured in two units – the twenty-foot equivalent unit and the forty-foot equivalent unit. These are the two international standards made to measure and transport cargo through different ships from different manufacturers. The dimension of an average twenty-foot equivalent units cargo container is 1,360 cubic feet. Accordingly, the carrying volume of the cargo ship is derived.

The current carrying capacity of the largest cargo ship is over 20,000 twenty-foot equivalent units, and the companies making the cargo ships are looking to enhance the capacity further. HMM Algeciras, the largest cargo ship in the world, has a capacity of 24,000 twenty-foot equivalent units.

Major cargo routes of the world

Did you know that the shipping industry has transported 11 billion tons of cargo over the ocean each year?  The major cargo transport routes facilitate freight movement from one destination to another and help the countries develop trade relations with each other. The major routes are:

1. Bosphorus Strait

It is one of the busiest shipping routes for cargo movement in Turkey. This strait links the Marmara Sea and the Black Sea. The strait is stretched at 19 miles, with the largest width of 2.3 miles in the north. About 132 cargo vessels cross through the route each day.

2. Panama Canal

The Panama Canal comes under the Republic of Panama. The canal reduces the travel time for cargo ships traveling between the Atlantic Ocean and the Pacific Ocean. About 14,000 vessels pass through the canal each year.

3. Saint Lawrence Seaway

The Saint Lawrence Seaway is the only strait in the United States. The route connects the Great Lakes to the Atlantic Ocean. The strait facilitates movement of over 300,000 pounds each year. The cargo includes agricultural products, clothing, machinery, lumber, dry commodities, among others.

4. Strait of Hormuz

The Strait of Hormuz connects the Gulf of Oman with the Persian Gulf. It houses three islands – Qeshm, Hormuz, and Hengam. This shipping lane facilitates oil trade and vessels. It is one of the most critical choke points in the world. Over 14 oil tankers pass through the route each day carrying 18.5 million barrels of oil, which constitutes around 30% of the total oil consumption in the world.

5. Suez Canal

Opened in 1969, the Suez Canal is one of the most important shipping routes in the world. The canal connects the Indian Ocean to the Atlantic Ocean. Did you know if the Suez Canal were not there, cargo ships would have to take extra 24 days to go around Africa? Getting through the canal takes around 16 hours from start to finish.

Why do companies prefer cargo ships for transporting goods for large distances?

Shipping companies usually prefer cargo ships for significant distances to achieve economies of scale. Transporting goods through cargo ships often comes at a low cost than any other mode.

Some of the advantages of transporting goods through cargo ships include:

  • Less cost

Over long distances, the ocean freight rates and cargo ship prices are usually low. At such a low fare, the shipping company can transport a large volume of goods, thereby saving costs. For transporting cargo internationally, airways are six to seven-time expensive than seaways. Therefore, cargo ships are the best option for any shipping company, as they have a large carrying capacity.

  • Efficiency

Cargo ships are built in a way that they can carry large volumes of cargo easily. Even if a shipping company’s consignment is small, it can also be transported via these cargo vessels. The companies can take advantage of cost-sharing if their transported volume is less, making the operations more efficient.

  • Ability to handle any cargo

The cargo ships can handle any type of cargo, be it oversized, bulky, fragile, etc. Often, other modes of transport may not carry such shipments because of their heavy load or any other transportation problems. Therefore, cargo transport via ships is the best way to send any type of material.

  • Safety

Safety is undoubtedly a big concern when transporting cargo through any mode of transportation. Cargo ships can safely handle hazardous cargo as cargo loaders and handlers take all precautions while handling it. Further, cargo containers are sealed and locked during transportation.

  • Environment safety

Reduction in carbon footprint has become essential for every business worldwide to protect the climate. Since other modes of transport have a higher carbon footprint, companies prefer cargo ships to transport the cargo for larger destinations.

Conclusion

The logistics and shipping industries are contributing a lot to the country’s growth. With a shift to digitalization in the logistics sector, transport apps such as Vahak make it easy for transport service providers and shipping companies to connect with the load owners and help them expand their business.

The transport services providers need to agree that the offline model is highly unorganized. Issues such as delay in procurement of new consignments, no movement of trucks for a long duration due to no work, etc., affect the business when managed offline.

But at Vahak, transport services providers will get connected to the shippers across the country, and you can choose your routes for servicing clients. There is no commission involved! You can download the Vahak app to connect with the people from the transport industry online and grow your business easily.

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