Are We Approaching "Peak Ship"?

Just under twenty years ago, in November 2006, a crowd of spectators gathered at Britain’s biggest container port, Felixstowe, to watch a little bit of history being made. The world’s biggest container ship was coming to the UK for the first time.

Towering over the quay, dwarfing every other vessel, the MS Emma Maersk was staggering large. The pictures were so astounding they made the front pages on Fleet Street. In the following months documentaries would be made about this extraordinary container ship, as tall as a high-rise building and as wide as a motorway. Even today, for some she is seared in the memory as the ultimate ship.

Some wondered, back then, whether ships could ever be bigger. After all, the Emma was testing the dimensions of modern day shipping. She was already too long to fit in the locks at the Panama Canal. She was right at the limit of the lengths permitted to go through the Suez Canal (400m). Emma, some said, was as big as things could get. Except, of course, they were all wrong.

The most common measure of the size of a container ship is the number of these 20 foot steel boxes you can fit on board. This is, as we’ll get to, one of those slightly meaningless numbers, since the number of boxes you can put on board depends enormously on how much each of those boxes weighs, but even so, the Emma’s TEU number (twenty foot equivalent unit) was a whopping 14,770.

But then, out of sight, away from the glare of media attention, something slightly unexpected happened: the size of container ships got bigger and bigger, from the CMA CGM Marco Polo in 2012 to the Ever Ace in 2021 and, today’s record holder, the MSC Irina, in 2023. The Irina’s capacity is 24,346, so fully 65 per cent more than the Emma could carry. Yet despite the fact that she is so much bigger than the Emma, few have ever heard of this ship, let alone seen her (or the five other Irina-class vessels that are, to all intents and purposes, identical).

My hunch is that this is because of something that has nothing to do with shipping or trade or economics and everything to do with colour. Of all the shipping lines, MSC has the least eye-catching colour scheme. Taiwanese group Evergreen’s hulls are bright green; Maersk’s ships are painted in such a distinctive shade of sky blue that the company trademarked it in 2019. MSC, on the other hand, paints its hulls a grey-black hue you could easily miss, were it not for the staggering size of the hulk. Most shipping companies are private, in both senses of the word, but few are as private as MSC. Thanks to some very canny dealmaking in recent years, this is now the biggest shipping company in the world and its founder, an Italian named Gianluigi Aponte, is one of the richest men in the world.

Aponte is a legend. Yet like many of the characters I cover in Trade World, he is somewhat shadowy. He is staggeringly wealthy - wealthier than most tech billionaires - yet because he and his company are so private, no-one knows precisely how wealthy.

But you could make the case that Aponte and his fellow shipping titans have made a more significant contribution to all of our lives than their counterparts in Silicon Valley, for an important reason, a reason best depicted by the chart below. Up until the 19th century, sending anything around the world (especially anything heavy) was cripplingly expensive.

That was due to a whole host of factors: the challenges of sailing stuff around by the wind, the cost of dealing with the hundreds of loaders, stevedores, sailors, carriage drivers and so on involved in the loading, unloading and transit of the goods, the risk of piracy and the cost of having to pay the customs and bribes imposed along the way. The upshot was that for the most part trade used to be about expensive stuff.

The exception that proved the rule was Ancient Rome. The Romans routinely transported grain from North Africa to Rome, in large part because the Roman Empire succeeded in eliminating piracy throughout the Mediterranean. Bread, in Roman times at least, was a function of trade. But for the rest of us, trade was for luxuries, not for staples.

In a sense, the defining feature of the past century and a half was that this entire assumption was turned on its head. It used to cost far more to shift a piece of clothing from India to Europe than it cost to make that item. Today it costs only a few pennies.

It’s fashionable to put this astoundingly consequential shift down to a single factor. For some, this was all because of containerisation, the 1950s/60s moment where shipping companies began to load stuff into their ships inside big steel boxes (those twenty foot equivalent units) instead of loading them painstakingly into jute bags and thence into the hold. For some this was all about the development of coal and then diesel fuelled ships replacing sailing ships. Some said this was a story of the reduction of tariffs. Some put it down to the Pax Britannica and Pax Americana - the two superpowers who enforced freedom of navigation in the 19th and 20th centuries respectively, ensuring merchants need no longer fear being attacked or taxed as they passed through chokepoints like Malacca or Hormuz.

But, fashionable as it is to pick a single explanation, in practice it was all of those things. Look at the chart again: the line (actually strictly speaking it’s two lines here because I had to combine two different data series covering two periods - if anyone lays their hands on a single long-run series please do let me know) starts dropping in the mid-19th century and then, save for a pause in the 1930s, just keeps on falling. And, in case it wasn’t already clear, I think this line is a massive, massive deal.

If you want to understand how it came to be that workers in the North East of England or the Rust Belt in the United States suddenly found themselves in direct competition with China... well, some of the explanation is the conventional stuff like China’s shift from an agrarian to an industrial economy, not to mention it joining the World Trade Organisation at the turn of the millennium. But the line is even more important. It is the story of the modern world. The lower that line fell, the less geography mattered, the easier it was to sell to the world and, conversely, to shut down a domestic factory and import whatever they were making instead. Semi-relevant factoid: when the Emma docked at Felixstowe that November day in 2006, she was loaded with Christmas decorations. She went back to China loaded high with British waste for recycling and disposal.

Trade World is, to some extent, the story of how that line fell, and what it did to the world. That’s partly a story about the conventional stuff like tariffs but, even more so, it’s about the background stories that rarely make the headlines. It’s about how ships quietly got so much bigger, about how a host of middlemen, from Malcolm Mclean to Gianluigi Aponte helped reduce the cost of moving stuff around. It’s about the unexpectedly dramatic story of the invention of comparative advantage (the economic theory that provides the foundations for free trade) and about Donald Trump. And it’s also about big ships.

Do read my essay on megaships for The Sunday Times this weekend, but, before we end, back to that question at the beginning: are we approaching “peak ship”?

After all, look at that chart of ship sizes at the top and you can probably see that the size of the biggest ships seems to have plateaued in recent years. Look at wikipedia and you see that nearly all the world’s biggest ships are more or less the same size: all at 24,000 TEU or thereabouts, all just under 400 metres in length, all with a beam of around 60 metres. Some argue that there are now diminishing returns in making ships any bigger. Partly this is a story of physical dimensions. Any longer and the ships wouldn’t be permitted through Suez. Anyway, in the real world, those TEU numbers are all entirely theoretical: since the real limitation for a ship is its draught, which depends not on the number of containers on board but how much they all weigh, in practice no ship actually carries anywhere close to 24,000 containers (unless, like the CMA CGM Notre Dame in the photo below, they are mostly empty containers there for a photoshoot).

There are the constraints at ports too. The Irina, for instance, stacks its containers 24 across, but there are only so many ports with cranes big enough to reach that far across a docked ship. Then there are the other constraints. For obvious reasons, many insurers are increasingly reluctant to insure ships laden with so much cargo, in the event that something goes wrong.

All of which is to say, there are pretty compelling suggestions that we have indeed reached “peak ship”. The main problem with this thesis, though, is that this isn’t the first time it’s been posited. Even before the Emma, there were people who suggested container ships were as big as they could get. And the one thing you do at your peril, as you will learn when you read Trade World, is to underestimate the middlemen who help connect supply on one side of the world with demand on the other.

PS Do read the very first review of Trade World in The Times.

And a reminder that if you pre-order Trade World between now and Sept 2 and email me at preorder@edmundconway.com attaching a proof of purchase, I will send you an exclusive essay with even more bonus material.

And if you want to hear more stories in person, I’ll be doing a bit of a book tour in the coming months. Full dates here. First stop next week is Chorleywood, where I’ll be talking about the extraordinary story of British bread - and the part this little town played in our national story. Come along and say hello!