From Old English 'scip' (ship, boat, vessel), from Proto-Germanic *skipą (ship), with a debated but widely discussed connection to PIE *skei- or *skep- (to cut, to split, to hollow out). The core etymological idea is that the earliest ships were made by splitting or hollowing out a tree trunk — a 'dugout' vessel. The same root family may underlie 'shape' (Old English 'scieppan,' to create, to give form by cutting) and 'shaft' (a cut or shaped rod). The Proto-Germanic form *skipą gave cognates
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The word 'equip' comes from Old French 'esquiper' (to fit out a ship), which was itself borrowed from Old Norse 'skipa' (to arrange, to man a ship) — making 'equip' and 'ship' distant relatives. The suffix '-ship' in words like 'friendship' and 'hardship' is the same word, originally meaning 'something shaped or created,' from the same root idea of cutting and fashioning.
the vessel and the abstract suffix happened early in Germanic. Key roots: *skipą (Proto-Germanic: "ship"), *skei- (Proto-Indo-European: "to cut, to split").