Abstract
The shipping industry pursues high efficiency and low cost of chartering operations for bulk shipping market depression. Each type of ship’s operational efficiency in bulk shipping corporations is more important than the corporation’s overall efficiency. In order to evaluate the efficiency gap between various ship types’ efficiency and overall efficiency, the research first assessed the performance by a decision making unit (DMU), and evaluated voyage charter (V/C) performance by the time charter equivalent (TCE). It also measured the distance between group scale efficiency (GSE) and average group scale efficiency (AGSE) by the data envelopment analysis (DEA). DEA is able to compare the difference between the group efficiency and overall efficiency, the AGSE value, to explore the direction and extent of the overall efficiency improvement. In the research, the V/C service of Panamax, Supramax, and Handymax is considered as the DMU, to calculate the efficiency of different ship types separately. Then, it employs TCE to measure and the DEA method to compare AGSE. The larger the AGSE value, the better the efficiency. Based on the results, in order to improve the overall operating efficiency of bulk shipping corporations, AGSE should be more emphasized than TCE and GSE. The results can provide professional managers of bulk shipping corporations with the basis for a strategic decision of chartering operations.
Highlights
Except for financial managerial tools by the bareboat charter, there are the time charter (T/C) and the voyage charter (V/C) in the chartering business
This paper develops a method to measure the efficiency for a group of decision making unit (DMU), which is called average group scale efficiency (AGSE)
The results indicate that the efficiency of Supramax is the best, whether assessed by time charter equivalent (TCE) or AGSE
Summary
Except for financial managerial tools by the bareboat charter, there are the time charter (T/C) and the voyage charter (V/C) in the chartering business. In T/C, the charterer gets full use of the vessel, but partial control, for specified period of time. During that time, he operates the vessel for his own account. In V/C, a vessel or part of a vessel is leased to a charterer for a voyage between specified ports, regardless the time it takes, and owner retains control and full responsibility for the operations of the vessel. In order to assess the operational performance of bulk shipping corporations, maximizing the time charter equivalent (TCE) and using data envelopment analysis (DEA) are both worthy methods of efficiency analysis. Based on the characteristics of DEA, this research further proposes the average group scale efficiency (AGSE), which is outlined in the subsequent section
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