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A 'merchant ship' is one that transports cargo and passengers during peace time. During wars, the same ships are auxiliaries to the navies of their respective countries, and are called upon to deliver military personnel and materiel.
Most countries of the world operate fleets of merchant ships. However, due to the high costs of operations, today these fleets are in many cases sailing under the flags of nations that specialize in providing manpower and services at favourable terms. Such flags are known as "flags of convenience". Currently, Liberia and Panama are particularly favoured. Ownership of the vessels can be by any country, however.
The Greek-owned fleet is the largest in the world. Today, the Greek fleet accounts for some 16 per cent of the world’s tonnage; this makes it currently the largest single international merchant fleet in the world, albeit not the largest in history.
In English, "Merchant Navy" without further clarification is used to refer to the British Merchant Navy; the United States merchant fleet is known as the United States Merchant Marine.
Merchant ships may be divided into several categories, according to their purpose and/or size.

Contents

Dry Cargo ships

Bulk carriers

Container ships

Tankers

Specialised ships

Coasters

Passenger ships

Cruise ships

Ferries

Dry Cargo ships

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. Cargo ships are usually specially designed for the task, often being equipped with cranes and other mechanisms to load and unload, and come in all sizes.
Dry cargo ships, today are mainly bulk carriers and container ships. Bulk carriers or bulkers are used for the transportation of homogeneous cargo such as coal, rubber, copra, tin, wheat. Container ships are used for the carriage of miscellaneous goods.

Bulk carriers

A 'bulk carrier' is ocean-going vessel used to transport bulk cargo items such as iron ore, bauxite, coal, cement, grain and similar cargo. Bulk carriers can be recognized by large box-like hatches on deck, designed to slide outboard or fold fore-and-aft for enable access for loading or discharging cargo. The dimensions of bulk carriers are often determined by the ports and sea routes that they need to serve, and by the maximum width of the Panama Canal. Most lakes are too small to accommodate bulk carriers, but a large fleet of lake freighters has been plying the Great Lakes and St. Lawrence Seaway of North America for over a century.

Container ships

'Container ships' are cargo ships that carry all of their load in truck-size containers, in a technique called containerization. They form a common means of commercial intermodal freight transport.

Tankers

A 'tanker' is a ship designed to transport liquids in bulk.
Tankers for the transport of fluids, such as crude oil, petroleum products, liquefied petroleum gas, liquefied natural gas and chemicals, also vegetable oils, wine and other food - the tanker sector comprises one third of the world tonnage.
Tankers can range in size from several hundred tons, designed for servicing small harbours and coastal settlements, to several hundred thousand tons, with these being designed for long-range haulage. A wide range of products are carried by tankers, including:

★ hydrocarbon products such as oil, LPG, and LNG

★ Chemicals, such as ammonia, chlorine, and styrene monomer

★ fresh water

★ wine
Different products require different handling and transport, thus special types of tankers have been built, such as "chemical tankers" and "oil tankers". "LNG carriers" as they are typically known, are a relatively rare tanker designed to carry liquefied natural gas.
Among oil tankers, supertankers were designed for carrying oil around the Horn of Africa from the Middle East; the FSO ''Knock Nevis'' being the largest vessel in the world. Knock Nevis was formerly the ULCC "Jahre Viking".
Apart from pipeline transport, supertankers are the only method for transporting large quantities of oil, although such tankers have caused large environmental disasters when sinking close to coastal regions, causing oil spills. See ''Exxon Valdez'', ''Braer'', ''Prestige'', ''Torrey Canyon'', ''Erika'', for examples of tankers that have caused oil spills.

Specialised ships

Specialised ships, e.g. for heavy lift goods or refrigerated cargo, roll on/roll off cargo (RoRo) ships for vehicles and wheeled machinery.

Coasters

Coasters, smaller ships for any category of cargo which are normally not on ocean-crossing routes, but in coastwise trades. Coasters are shallow-hulled ships used for trade between locations on the same island or continent. Their shallow hulls mean that they can get through reefs where sea-going ships usually cannot (sea-going ships have a very deep hull for supplies and trade etc.).

Passenger ships

A 'passenger ship' is a ship whose primary function is to carry passengers. The category does not include cargo vessels which have accommodations for limited numbers of passengers, such as the ubiquitous twelve-passenger freighters once common on the seas in which the transport of passengers is secondary to the carriage of freight. The type does however include many classes of ships which are designed to transport substantial numbers of passengers as well as freight. Indeed, until recently virtually all ocean liners were able to transport mail, package freight and express, and other cargo in addition to passenger luggage, and were equipped with cargo holds and derricks, kingposts, or other cargo-handling gear for that purpose. Modern cruiseferries have car decks for lorries as well as the paseenger's cars. Only in more recent ocean liners and in virtually all cruise ships has this cargo capacity been suppressed.

Cruise ships

A 'cruise ship' or a 'cruise liner' is a passenger ship used for pleasure voyages, where the voyage itself and the ship's amenities are considered an essential part of the experience. Cruising has become a major part of the tourism industry, with millions of passengers each year as of 2006. The industry's rapid growth has seen nine or more newly built ships catering to a North American clientele added every year since 2001, as well as others servicing European clientele. Smaller markets such as the Asia-Pacific region are generally serviced by older tonnage displaced by new ships introduced into the high growth areas.
Cruise ships operate on a mostly set roundabout course (i.e. they tend to return to their orginating port) whereas ocean liners are defined by actually doing ocean-crossing voyages, which may not lead back to the same port for years.^[1]

Ferries

A 'ferry' is a form of transport, usually a boat or ship, but also other forms, carrying (or ''ferrying'') passengers and sometimes their vehicles. Ferries are also used to transport freight (in lorries and sometimes unpowered freight containers) and even railroad cars. Most ferries operate on regular, frequent, return services. A foot-passenger ferry with many stops, such as in Venice, is sometimes called a waterbus or water taxi.
Ferries form a part of the public transport systems of many waterside cities, allowing direct transit between points at a capital cost much lower than bridges or tunnels.