Buoyancy was first understood by Archimedes of Syracuse over two hundred years B.C.  Archimedes realized that: “any object, wholly or partially immersed in a fluid, is buoyed up by a force equal to the weight of the fluid displaced by the object”.  Practically, this can be demonstrated by taking an empty plastic bottle which is sealed with its cap, and placing it in a sink full of water.  The bottle sits on slightly below the surface of the water, because the bottle only weighs a few grams.  Since the density of water is 1g/ml, you only need to displace a few ml of water to balance the weight of the bottle, so the bottle floats.  As you add more and more water to the bottle, you will notice that the bottle sits lower and lower in the water, but that the water line in the bottle is always slightly lower than the water line on the outside of the bottle.  Eventually, if your sink is deep enough, you will notice that the bottle does not touch the bottom of the sink, but is submerged.  This is termed neutral buoyancy, and is how scuba divers can stay at a depth without constantly swimming. 

So, what matters for buoyancy is the ratio of mass of the object to its volume and how this compares to the fluid it is in.  If the density of the object is greater than that of the fluid, the object will sink.  If it is less than that of the fluid, then it will float.  So, ships can carry cargo on the open ocean because there is a great deal of air in the ship which reduces its density, even though a block of the metal composing the ship and the cargo in the ship will sink if placed directly in the water. 

For any type of ship, the stability of the vessel, as well as how full it is, determines how “seaworthy” it is.  Would you want to sail on a ship that would capsize or flip over with the first good size wave?  Would you want to sail on a cargo ship which was so full that the water was one inch below the deck of the ship?  Stability is a separate issue which will dealt with later (as it also applies to space satellites).  The safe draft line (aka the international load line or the Plimsoll line) indicate the maximum height of the water on the hull of the ship.  This is to minimize under normal storm conditions the chances of foundering, or filling the ship with water from waves crashing over the deck.  Every ship has this line, plus additional lines to distinguish load lines in salt water vs. fresh water and in warm water vs. cold water.