The impact of operational and strategic management on liner shipping efficiency: a two-stage DEA approach

Abstract

This paper aims to measure the relative efficiency of liner shipping companies in terms of operational and financial performance and further investigates the impact of strategic and operational management on efficiency performance. A two-stage Data Envelopment Analysis (DEA) approach is employed combining DEA and Tobit regression, which has been extensively used in various research areas. 14 liner shipping companies from the top 20 container lines in terms of fleet capacity were included in this analysis. The results suggest that the firm size (in terms of TEU capacity), ship size, the ratio of chartered vessels, use of new vessels, and the formation of alliances all make a positive contribution to the financial performance of liner shipping companies. Ship age and ship type did not show a significant contribution to the financial performance and, for the operational performance, any of these determinant factors were not significant. This analysis is able to provide container shipping companies with information on the managerial and strategic implications of how managerial options influence operational and financial performance. In addition, maritime researchers will benefit from this study, measuring the efficiency of container shipping companies and the factors that influence efficiency, as this study is the first to investigate and model factors of relative efficiency of container shipping companies to the authors’ knowledge.