Technical Efficiency of Container Terminals in China Using a Multi-Activity Data Envelopment Analysis Model

Abstract

The aim of this paper is to provide a multi-activity data envelopment analysis (DEA) model which can represent both quayside and landside operations in a unified framework. The model is applied to simultaneously estimate the overall container terminal efficiency: quayside operation efficiency and landside operation efficiency. To do this, 20 selected container terminals in China for the year 2006 are selected for empirical applications. The results show that the average quayside operation efficiency is higher than the average landside operation efficiency (0.630 vs. 0.588), but these measures differ significantly for individual terminals. The main advantage of the multi-activity DEA model is that it can be utilized to detect the source of poor performance of container terminals rather than just evaluating the overall efficiency as in the traditional DEA model. INTRODUCTION To remain competitive, a container port must satisfy the specific demands of its customers and facilitate cost reductions. In short, the port must improve its operational efficiency. As a consequence, many researchers have focused attention on the measurement of efficiency in the container port or terminals. For example, Valentine (2001), Tongzon (2001) and Cullinane (2006) all apply various single-measure DEA models to study the port performance of different countries. However, the current literature still treats these sub-technologies as a “black box” with no information about what happens inside container terminals. If the performance measurement model enables a description of the sub-activities: quayside and landside operations, it will provide extra management information that the traditional DEA models cannot address. Therefore, measuring quayside operations efficiency (QTE), landside operations efficiency (LTE), and the overall efficiency (TE) in a unified multi-activity DEA analysis model provides for a more realistic and reasonable view of container terminal systems. With these objectives, the rest of this paper is structured as follows. The following section describes the framework for the estimate of a container terminal system and is followed by the proposed methodology for assessing QTE, LTE and TE for container terminals in a unified framework. The sample data is then described, the ICCTP 2009: Critical Issues in Transportation Systems Planning, Development, and Management ©2009 ASCE 3086