Efficiency Assessment of Seaport Terminal Operators Using DEA Malmquist and Epsilon-Based Measure Models

Chia-Nan Wang,Ngoc-Ai-Thy Nguyen,Hsin-Pin Fu,Hsien-Pin Hsu,Thanh-Tuan Dang

doi:10.3390/axioms10020048

Chia-Nan Wang, Ngoc-Ai-Thy Nguyen + Show 3 more

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https://doi.org/10.3390/axioms10020048

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Abstract

Today, over 80% of global trade is seaborne. In a world of global supply chains and complex industrial development processes, seaports and port operators play an integral role of utmost importance and act as an incentive to the development of the marine economy and particularly, the national economy in general. Most importantly, the supply chain and demand shocks of Covid-19 on container ports and the container shipping industry have intensified competition among terminal operators. Thus, it is imperative that managers evaluate competitiveness by measuring their past and current performance efficiency indexes. In so doing, we present a hybrid data envelopment analysis (DEA) model that combines the DEA Malmquist method and the epsilon-based measure (EBM) for the first time to address the issue of performance evaluation of seaport terminal operators. The applicability of the proposed hybrid approach is illustrated with a case study of the top 14 seaport companies in Vietnam. First, the Malmquist model is used to assess the total productivity growth rates of the companies, and its decomposition into technical efficiency change (catch-up) and technological investment (frontier-shift). Second, the EBM model is used to calculate the efficiency and inefficiency score of each company. Besides indicating the best-performing companies from certain aspects during the research period (2015–2020), the results reflect that the gap of applying the EBM method in the field of the maritime industry was successfully addressed, and together with the Malmquist model, the integrated framework can be an effective and equitable evaluation model for any area. Furthermore, the managerial implication provides a useful guideline for practitioners in the maritime sector in improving their operational efficacy and helps customers in selecting the best seaport companies in the outsourcing strategy.

Highlights

Licensee MDPI, Basel, Switzerland.Maritime transport remains the backbone of the ever-increasing globalized economy and international trade system, supporting significantly the ongoing and complex processes of global supply chains
According to epsilon-based measure (EBM)’s procedures, the diversity of production possibility set by inefficiency scores of
The main purpose of the current study is to provide a viable and complete framework for the efficiency assessment process of seaport terminal operators, aiming to focus on two outlooks that reflect two pictures in the performance evaluation of port companies

Summary

Introduction

Maritime transport remains the backbone of the ever-increasing globalized economy and international trade system, supporting significantly the ongoing and complex processes of global supply chains. Over 80% of world merchandise trade by volume is carried by sea and handled by ports [1]. Seaport terminals form vital links in the overall trading chain, acting as an incentive to the development of the marine economy and a key contributor to a nation’s international competitiveness. In the hinterland, seaport terminal and terminal operators play a role of utmost importance as a crucial connection between sea and land transport. Port activities are no longer limited to just cargo handling. An increasing number of port terminals, serving either cargoes or passengers, are managed by operators maintaining an international portfolio. The balance between market demand, ship capacity and frequency, and hinterland distribution requires a variety of footprints and design considerations [2]

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