Sources of efficiency changes at Asian container ports

Abstract

Purpose This study aims to investigate the efficiency changes of 23 major Asian container ports for the period from 2000 to 2007. In addition to assess the general trend, it also attempts to decompose the overall efficiency change into technological efficiency change, technical efficiency change and scale efficiency change to help port authorities to devise operational strategies. Design/methodology/approach The Malmquist index method is used, which is derived from data envelopment analysis. In this model, technological improvement comes from using state-of-the-art technologies, technical improvement is from rationalizing of port inputs and scale efficiency is from adjustment of port operational scales. Findings On average, the investigated ports have improved their efficiencies by 14.3 per cent. Such efficiency gains can be attributed to a 41 per cent increase in pure technical efficiency, a 47.5 per cent increase in scale efficiency and a 30.5 per cent decrease in technological efficiency. The scale efficiency contributes the most to the overall efficiency improvement, while technical and technological effects seem to have less impact. The fact that technological efficiency has little variance seems to suggest that this source of efficiency gain may not bring substantial competitive advantage. Research limitations/implications The sample period is 2000-2007, so the impact from the Asian financial crisis or the economic downturn was not covered. Also, the port throughputs data do not separate shipment and transhipment. Originality/value This study provides valuable suggestions to improve efficiency for container ports along the “Maritime Silk Road.”