The Efficiency of Container Terminals in Mainland China: An Application of DEA Approach

Abstract

In the context of China economy's booming up and the dominant place in the world shipping market share, the efficiency of container terminals has become an important factor to the interaction between China and the world. The paper uses DEA models and Malmquist TFP approach to measure the efficiency of container terminals in mainland China. Our data, which is from China's port yearbook (2004 ~ 2006), includes 45 terminals with an annual throughput over 10,000 TEUs, from 2004 to 2006. Our empirical results show that the average technical efficiency scores are only 0.454, 0.546 and 0.603 in 2003, 2004 and 2005 respectively. Most of the efficient terminals are lying in the largest ports such as Shanghai and Shenzhen. The average Malmquist TFP index score (1.125) shows that the productivity of China's container terminals are improved during the 3 years. Regarding the effect of capital ownership shipping line structure characteristics, we find that the Sino-foreign joint ventures perform better than domestic companies, and the terminals handling the containers of international shipping lines are more efficient than those engaged in domestic shipping lines.