Evaluating the inter-temporal efficiency trends of international container terminals using data envelopment analysis

Abstract

As the world economy slipped into recession in recent years, growth in international trade slowed down considerably. Slow growth in international trade often leads to a decline in inter-modal traffic and the subsequent reduction in demand for container services. The reduced demand in container services and the continuous glut of container port facilities throughout the world have sparked fierce competition among international container terminals. In an effort to help port authorities develop a winning formula in the increasingly competitive container market, this paper aims to develop a meaningful set of benchmarks that will set the standard for best practices. In particular, we propose an inter-temporal data envelopment analysis (DEA) that is proved to be useful for measuring the operational efficiency of various profit or non-profit organisations over time. Using the examples of major container terminals in South Korea, this paper illustrates the usefulness of DEA for the continuous improvement of container services.