Efficiency analysis of container ports and terminals
- Publisher: UCL (University College London)
In the past two decades the steady growth of seaborne trade has resulted in the
increase of container ships, container ports and their terminals. The structure of the
shipping market is, moreover, continuously evolving. On the carrier side, shipping
companies form consortia and alliances; on the port side, global terminal operators
and dedicated container terminals are emerging. The aim of this research is to
evaluate the efficiency of container ports and terminals and to study how to improve
the scale efficiency of any particular port/terminal. In particular we study how certain
factors influence the efficiency of container ports and terminals.
Regional container ports and global container terminals are examined based on the
econometrics benchmarking method Stochastic Frontier Analysis (SFA). Two datasets
are used, a panel dataset for 32 container ports in the North Mediterranean Sea over a
nine-year period, and a cross-sectional dataset for 165 container terminals worldwide.
Net-effect and gross-effect SFA models are applied to both datasets.
Technical, scale and overall efficiencies of individual ports/terminals are evaluated.
Operation and investment strategies are examined for selected ports and terminals.
The majority of the container ports and terminals in our North Mediterranean Sea
samples are found to be technically inefficient: 90% of container ports have their
technical efficiency lower than 0.80; 95% of container terminals have their technical
efficiency lower than 0.80. The research concludes that trading volume plays a key
role in the efficiency of a container port. The annual percentage increase in port
output is slower than what the technological improvement allows. Container terminals
are proven to be more productive than multiple purpose terminals. Global terminal
operators were not proven to out-perform local terminal operators as was expected. It was also found that the container terminal operation industry is over-scaled. The
research findings here can potentially affect decisions made by carriers, terminal
operators and policy makers, as it provides an overview of efficiencies for all
container ports/terminals in the two datasets and also examines in detail the sources of
inefficiency for individual ports.
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