Rationalization in Korea container terminal using DEA cross-efficiency and cluster analysis

Abstract

Ports and container terminals today are interchanges for maritime and land transport as well as important facilities that serve as communication channels for nations, regional economies, and forelands. They also act as suppliers providing cargo handling and international logistics services at the national level. Traditionally, the port industry was less competitive than other industries. However, competition among terminals is intensifying due to recent environmental changes, and the excessive competition between Korean container terminals has produced negative effects. Therefore, it is necessary to establish terminal rationalization plans to resolve excessive competition among container terminals at the national level. This study examined the direction for terminal rationalization at the national level to alleviate excessive competition among container terminals based on the theory of supply base rationalization. Data envelopment analysis (DEA) cross-efficiency and cluster analysis were combined to provide rationalization plans based on efficiency measurement. This study is significant as it presents a strategic analytical tool to establish terminal rationalization plans at the national level and also proves its applicability.