A Comparative Study on Increasing Efficiency of Chinese and Korean Major Container Terminals

Abstract

As the competition among East Asia container terminals has become increasingly fierce, every port is striving to increase its investments constantly to maintain the competitive edge. The unreasoning behavior, however, has induced that substantial waste and inefficiency exists in production. From this perspective, data envelopment analysis provides a more appropriate benchmark. By applying three kinds of DEA models, this study acquires a variety of analytical results on operational efficiency of the 31 major container terminals. Firstly, this study finds the reason of inefficiency. It is followed by identification of the potential areas of improvement for inefficient terminals by applying slack variable method. Furthermore, return to scale approach is used to assess whether each terminal is in a state of increasing, decreasing, or constant return to scale. The results of this study can provide container terminal managers with insights into resource allocation and optimization of the operating efficiency.