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The main explanation for the difference, as in most cases with words, is historical.

The word 'ship' refers to the age of sail and refers to the way that sails were rigged. (A schooner is so called because of the way the masts and sails are arranged) Such ships, being large and built for the defense of the country, were managed by the Navy. Any commercial enterprise at the time could not afford such large ships with large crews. In addition to this, a ship has more than one deck.

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Boats were smaller with a single deck and historically predated the ship. They easily managed . A boat could carry personnel from ship to shore and return. It could be hoisted aboard the ship for future use. A boat would be used on lakes and in coastal waters. Boats have served as short distance transport since ancient times. Historically boats derived as 'dugouts from hollowed trees'

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A vessel is again an ancient word coming from Latin 'Vascellum' meaning a small vase or a container. The association between containers and things that can float, appears in many languages and passed into common usage as something that could carry people or objects. The word 'vessel' is thought to be larger than a boat, but not necessarily larger than a ship. But, it sometimes depends on the individual describing what he/she sees.

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In short, common usage says a 'ship' is Naval, a 'boat' is commercial or private and a 'vessel' is a posh word for anyone who does not know the difference

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Q: What is the difference between boat ship and vessel?
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