Research on Effectiveness and Scientificalness of Logistics Based on PCA-DEA Approach: An Illustrative Example from Yangtze River Delta Port of China

Abstract

Yangtze River Delta region in China is rich in port resources. To prosper city according to has become one of the strategies of promoting economy development. Therefore, the development of port logistics has a very important position in Yangtze River Delta region economy development. This paper sets up a new evaluation index system for port logistics efficiency and effectiveness evaluation for 16 municipal ports in Yangtze River Delta region, then an empirical study is carried out by using Principal Component Analysis (PCA) and Data Envelopment Analysis (DEA) approach. According to the double evaluation system of PCA and DEA, the port industrial clusters in Yangtze River Delta region is divided into four categories to measure the effectiveness and efficiency of port logistics infrastructure. Being one of the most developed areas in China, the Yangtze River Delta region possessed its GDP at 4.69 trillion in 2007, at a growth of 14.1%, accounting for 18.8% of the national economy. What's more, its growth was much higher than the national average growth of 11.1%, accounting for one fifth of the total domestic logistics. Its unique geographical location and economic develop level has laid a good foundation for the local development of modern logistics industry (1). The following years is a fast yet steady development period for national economy, also stands for a period that Yangtze River Delta will face in the new round of rapid development. Additionally, the logistics industry in the Yangtze River Delta will meet a lot of strategic opportunities of great-leap-forward development. The port in the Yangtze River Delta plays a key point in ameliorating local investment environment and promoting regional competitiveness as well as export-oriented economic development services. Port is vital in integrated logistics system, is the rally point where maximum of goods flows to in the transportation chain, assembling a large number of goods from inland and sea transport. In addition, port acts as an important service base and distribution center in international trade. Therefore, in the process of developing modern logistics and constructing logistical center, port plays a leading and key role in development of modern logistics, owning to its large scale of transportation capacity and the role in organizing logistics network. At the same time, developing port logistics is beneficial to expanding the port throughput by combined effect of cargos, which can add to the values of port enterprises, and comprehensively enhance the competitiveness of the port. In recent years, with the rapid development of the port construction in Yangtze River Delta, each port lacked overall consideration under construction. They invested to expand their docks from their own economic interests, resulting in unclear division of labor, blind competition, overlapping investment and low-level redundant construction, which in turn led to the unreasonable structure of regional port layout. Meanwhile, the increasingly intense competition among neighboring ports prevents the carriers from choosing the correct port in accordance with