The Impact of Port Technical Efficiency on Mediterranean Container Port Competitiveness

Port efficiency is a significant element that stimulates port competitiveness and enhances regional development. With increasing international maritime traffic and changing technology in the maritime transport sector, containerisation and enhanced logistic activities, infrastructure might be one of the main determining factors of port competition (Merk & Dang, 2012). Due to the increasing container traffic and the high quality of service required by the shipping lines, Mediterranean container ports are being compelled to enhance port efficiency to improve comparative advantages that will increase cargo traffic and satisfy the customers’ requirements. The Mediterranean Sea is a link point between Europe, Africa and Asia. This research aims to examine the impact of ports' technical efficiency on the improvement of Mediterranean container ports’ competitiveness. The research analyses the competitiveness and the relative efficiency of the top 22 container ports in the Mediterranean basin using a cross-section, panel data and window analysis application of data envelopment analysis (DEA) for the period between 1998 and 2012. The selected 15 year period enables the analysis of Mediterranean container port market dynamics and the benchmarking of the technical efficiency of the selected ports for three consecutive market cycles. This research can be classified as quantitative analytical research. The research follows the concept of the Industrial Organization (IO) and the Structuralism (Harvard school) methodology that analyses the market Structures, Conduct and Performance (SCP) of market players. The study conducts a simultaneous three-stage procedure: in the first stage, the competitiveness of the main container ports in the Mediterranean is analysed through the study of market structure and conduct. Market structure is assessed through measuring and analysing market concentration by using four different methods. These methods are: the K-Firm concentration ratio (K-CR), Hirshman-Herfindahl Index (HHI), the Gini coefficient (GC) and the generalized entropy index. Boston Consultant Group (BCG) matrix is also used to visualize the dynamics between ports in the defined market and assess the ports' competitive position. Market conduct is analysed using shift-share analysis (SSA) to get a thorough understanding of the issue of port traffic development. In the second stage, market performance is analysed through the use of the non-parametric models of Data Envelopment Analysis (DEA) which estimates the relative efficiency scores and ranking seaports according to their efficiency. Five DEA models are adopted for comparative purpose, the DEA- CCR, DEA-BCC, the Super-Efficiency (A&P, 1993), the sensitivity analysis and slack variable analysis models. In the third stage, to examine the impact of port efficiency on port competitiveness, a number of hypotheses are examined through the use of parametric correlation coefficients (Spearman’s rank order) and Simar and Wilson (2007) procedure to bootstrap the DEA scores with a truncated regression. Using this approach enables more reliable evidence compared to previous studies analysing the efficiency of seaports. The main findings demonstrate that the recent deconcentration tendency of the Mediterranean container port market is due to the increased number of market players which will in turn reshape the market structure, change the container port hierarchy and intensify the competition between ports as the market shifts from oligopoly to pure competition. The research findings also reveal the existence of inefficiency pertaining to the management of container ports in the region, since the total technical efficiency is found to be below 50% on average. This relatively limited technical efficiency of the Mediterranean container ports indicates the need for appropriate capital investments for ports’ infra/superstructure. In particular, those ports whose efficiency is not favoured by some factors such as size, geographical position and socio-economic conditions of the region in which they are located, must adopt suitable reform strategies to promptly improve their efficiency and competitive position. What differentiates this work from previous studies on the subject is that both cross-sectional and panel data have been collected and analysed at the level of individual container ports in the Mediterranean. The study is based on a wide range of methodologies, both parametric and non-parametric, that have ensured the validity of the empirical examination that has been undertaken and the results obtained. The research analysed the Mediterranean container ports competitiveness, benchmarked and ranked their efficiency by considering the Mediterranean in its totality, including South Europe, Middle East and North Africa. The study puts forward a way to assess container port efficiency based on simple, yet validated and meaningful physical efficiency measures

Evaluating the efficiency and productivity of malaysian logistics companies using epsilon-based measure and malmquist index during the Covid-19 pandemic

Purpose: The impact of the Covid-19 outbreak since March 2020 has put Malaysia’s logistics sector in a contrasting reality to other sectors, as during the implementation of the movement control order (MCO), this sector was declared as providing essential service and allowed to operate in order to fulfil customers’ needs. This study aims to assess the efficiency and productivity of the logistics industry in Malaysia before and during the pandemic so that the performance of this industry can be observed. Design/methodology/approach: This study uses secondary data. Yearly records from the annual reports for the period of 2010–2020 were gathered pertaining to 15 Malaysian logistics companies treated as decision making units (DMUs) in this study. The efficiency and productivity of the Malaysian logistics industry during the Covid-19 pandemic have been assessed by using a hybrid DEA model consisting of a combination of epsilon-based measure (EBM) and Malmquist index. Findings: Findings showed that Lingkaran Trans Kota Holdings Berhad was the most efficient and productive logistics company with an average efficiency score of 1 and 12.7% growth in the average productivity index during the study period. In contrast, MISC Berhad obtained the lowest average efficiency score of 0.285. Nevertheless, the average productivity index for MISC Berhad showed an increase by 25.7%. During the early outbreak of Covid-19, Complete Logistics Services Berhad achieved full efficiency and also attained the highest positive growth of 76.2%. Harbour-Link Group Berhad was the least efficient company, scoring an efficiency score of only 0.254 and a decline in productivity growth by 40.8%. Research limitations/implications: The data used in this study may not be sufficient to represent the performance of the entire logistics industry as the pandemic is still not completely over. More useful insights can be obtained if the data can be extended until 2022 to assess the performance of logistics companies after the outbreak of Covid-19 in Malaysia. Many resources that have not been explored in this study and past research may provide an avenue for further research on the performance measurement of logistics companies, particularly in the Malaysian context. Practical implications: This study’s discovery may be used to facilitate the evaluation of resource utilisation and help inefficient logistics companies maximise their efficiency. Also, the findings may be used to help policymakers evaluate the existing policy in order to ensure that logistics companies have sufficient resources to offer reliable and efficient courier services. Originality/value: Although numerous studies have been conducted on the efficiency measurement of logistics companies, so far, scarce research in Malaysia has deployed a quantitative approach to measure the performance of Malaysia’s logistics industry, especially during the Covid-19 pandemic. Therefore, this study fills this gap by assessing the efficiency and productivity of the logistics industry in Malaysia before and during the pandemic of Covid-19Peer Reviewe

The Competitiveness of Ports in Emerging Markets : The case of Durban, South Africa

This report provides a synthesis of main findings from the OECD Port-Cities Programme, created in 2010 in order to assess the impact of ports on their cities and provide policy recommendations to increase the positive impacts of ports on their cities. This Programme was directed by Olaf Merk, Administrator Port-Cities within the OECD Public Governance and Territorial Development Directorate. This synthesis report was directed and written by Olaf Merk; it draws on the work of a number of other contributors: César Ducruet, Jasper Cooper, Jing Li, Ihnji Jon, Maren Larsen and Lucie Billaud. The report has benefited from comments from Bill Tompson, Nils-Axel Braathen, Jane Korinek, Nicolas Mat and Juliette Cerceau. The synthesis report is based on findings from a series of OECD Port-Cities case studies. Such case studies were conducted for Le Havre/Rouen/Paris/Caen (France), Hamburg (Germany), Helsinki (Finland), Marseille (France), Mersin (Turkey), Rotterdam/Amsterdam (the Netherlands), Antofagasta (Chile), Bratislava/Komárno/Štúrova (Slovak Republic), Durban (South Africa) and Shanghai (China). Within the framework of these studies, study visits to these port-cities were conducted, which included a series of interviews with the port-city related actors and stakeholders in these places. The OECD Port-Cities Programme also benefited from visits to the following ports and port-cities and discussion with port-related actors in the following port-cities: Hong Kong, Shenzhen, Singapore, Casablanca, Venice, Trieste, Genoa, Valparaíso, Varna, Gdansk, Koper, Vienna, Antwerp, Felixstowe, Los Angeles, Long Beach, Sydney and Newcastle (Australia). Contributions and inputs into the OECD Port-Cities case studies and related working papers were provided by César Ducruet, Elvira Haezendonck, Michael Dooms, Patrick Dubarle, Markus Hesse, Géraldine Planque, Theo Notteboom, José Tongzon, Jörg Jocker, Oguz Bagis, Angela Bergantino, Claude Comtois, Nicolas Winicki, Thai Thanh Dang, Claudio Ferrari, Alessio Tei, Anna Bottasso, Maurizio Conti, Salvador Saz, Leandro Garcia-Menéndez, Zhen Hong, Zhao Nan, Angela Xu Mingying, Xie Wenqing, Du Xufeng, Wang Jinggai, Jing Li, Matthieu Bordes, Rachel Silberstein, Xiao Wang, Jean-Paul Rodrigue, Jasper Cooper, Marten van den Bossche, Carla Jong, Christelle Larsonneur, Walter Manshanden, Martijn Dröes, Evgueny Poliakov, Olli-Pekka Hilmola, Charlotte Lafitte, Caroline Guillet, Léonie Claeyman, Suzanne Chatelier. The Programme has been enriched through the interaction with these experts. Within the framework of the Programme, three different workshops in Paris were organised and benefited from presentations by: César Ducruet, Markus Hesse, Elvira Haezendonck, Claudio Ferrari, Jan Egbertsen, Ingo Fehrs, Stijn Effting, Michael Vanderbeek, Alessio Tei, Philippe Deiss, Birgit Liodden, Johan Woxenius, Hyong Mo Jeon, Dimitrios Theologitis, Carla Jong, Lorene Grandidier, Dominique Lebreton, Claude Comtois, Marten van den Bossche, Matt Bogdan, Alice Liu, Jan Green Rebstock. Within the framework of the Programme, the Administrator has provided presentations and interventions in conferences organised by: European Committee of the Regions (COTER), European Seaport Organisation (ESPO), Moroccan Association for Logistics (Amlog), International Association of Ports and Harbors (IAPH), Port of Long Beach Board of Harbor Commissioners, City of Shenzhen, Korean Transport Institute (KOTI), Korean Maritime Institute (KMI), French Association of Town Planners (FNAU), Italian Association of Transport Economists (SIET), World Conference of Transport Research Society (WCTRS-SIG2), Maersk, Port Finance International, BSR Clean Cargo Working Group, Infrastructure Australia, International Association Cities Ports (AIVP), Inter American Committee for Ports, International Transport Forum (ITF), Florence School of Regulation, Cargo Edições Lda, Logistics Portugal, International Forum on Shipping, Ports and Airports (IFSPA), Port of Amsterdam, Port of Rotterdam, Port of Hamburg, Université du Sud Toulon-Var, Colloque Axe Seine Acte II. The Programme has benefited from the support of: the Netherlands Ministry of Economy, City of Rotterdam, City of Amsterdam, Port of Amsterdam, Çukurova Development Agency, City of Helsinki, Port of Marseille, Slovak Ministry of Transport, Construction and Regional Development, Slovak Ministry of Foreign Affairs, City of Hamburg, Transnet South Africa, Provence-Alpes-Côte d’Azur Region, Bouches du Rhône Department, Syndicat mixte du Schéma de Cohérence Territoriale Ouest Étang de Berre, Communauté d’agglomération Marseille Provence Métropole, City of Marseille, Chamber of Commerce and Industry Marseille Provence, the Agence d’Urbanisme de Marseille, the Union Maritime et Fluviale, l’Agence d’Urbanisme de la Région du Havre et de l’Estuaire de la Seine (AURH), l’Agence d’Études d’Urbanisme de Caen Métropole (AUCAME), l’Atelier Parisien d’Urbanisme (APUR), l’Institut d’Aménagement et d’Urbanisme de la région d’Île de France (IAU IDF), l’Agence d'Urbanisme et de Développement de la Seine Aval (AUDAS), la Ville du Havre, la Communauté d’Agglomération Havraise (CODAH), la Communauté de l’Agglomération Rouen Elbeuf Austreberthe (CREA), le Grand Port Maritime du Havre (GPMH), le Grand Port Maritime de Rouen (GPMR), Ports de Paris. The report, as well as the Port-City case studies and related thematic papers can be downloaded from the OECD website: www.oecd.org/regional/portcities Further enquiries about this work in this area should be addressed to: Olaf Merk ([email protected]) of the OECD Public Governance and Territorial Development Directorate

Shippers’ Changing Priorities in Port Selection Decision – A Survey Analysis Using Analytic Hierarchy Process (AHP)

This paper analyzes different criterion that shippers employ in their port selection process. It uses results from a survey conducted on regional shippers from the chemical and life sciences industries that ship full container and LCL cargo of hazardous and non-hazardous chemicals westbound (from U.S. east coast to Asia). Using an Analytic Hierarchy Process (AHP) framework and participants’ comparative scores, factors affecting a shipper’s port choice are prioritized. Findings suggest that port congestion and delays on the west coast ports in the U.S. and its effect on shippers’ supply chains have changed their priorities; price and port characteristics are no longer their primary decision factors

The port attractiveness index: application on African ports

The overall operational reputation of a port is based on objective factors, including infrastructure endowments and efficiency in the logistics chain as well as on perceived subjective factors such as reliability, and level of corruption. In this work we analyze the concept of port attractiveness, starting with the hypothesis that subjective port determinants (i.e., user perception) and objective/endogenous and exogenous factors can be quantified together. We thus determine the Port Attractiveness Index and test it using 41 container ports of 23 African countries for the period 2006-2010. We apply a bottom-up approach to investigate the structural relationships among the three sets of determinants (endogenous, exogenous and subjective) that impact on port attractiveness. Our methodological approach employs structural equation modeling. Results indicate that subjective factors are indeed influential variables for port attractiveness. Moreover, when examining port attractiveness and investment strategies, we demonstrate that in many cases in African ports governments should implement soft infrastructure as a first step rather than investing in hard infrastructures

The Impact of Seaport Competition on Technical Efficiency: Simar–Wilson Analysis of European Container Ports

This paper examines the effects of environmental factors (port-city GDP, population size, connectivity to hinterland, draught level and distance from the closest port Hub) and competition on the efficiency of a number of North and South European seaports. For this purpose, a bootstrap data envelopment analysis truncated regression approach was applied to 35 container ports, in the 2004 - 2018 period. Research findings indicate that the connectivity of a port’s country and draught level have a positive impact on the efficiency of both Northern and Southern European seaports. In addition, our results revealed that the efficiency of Southern European seaports tends to increase with competition intensity, whereas that of Northern European seaports seems to decrease with intensified competition, due to investment discrepancies, necessary for attracting a wider range of customers

A Decision Support System for Intermodal Logistics under Considerations for Costs of Security

Global supply chains have been challenged by the increased awareness of security risks, including those of terrorism, theft, and damage, and the potential in these risks for significant damages. Additionally, the pressure security initiatives and regulations, particularly at sea and air ports, threaten to add to congestion at these hubs in the international flow of goods and materials. Improving the efficiency of the flow of goods and materials, and therefore the stability and competitiveness of their supply chains, is the focus of this research. A decision support to combine strategic objectives with operational transport decision making is built to incorporate security considerations

Northeast Asian containerised maritime logistics: supply chain collaboration, collaborative advantage and performance

This thesis aims to develop and validate the dimensions of supply chain collaboration and collaborative advantage in the containerised maritime industry and explores the impact of supply chain collaboration on collaborative advantage and port performance. Additionally, this thesis tests a mediation effect of collaborative advantage on the relationship between supply chain collaboration and port performance. This thesis employs a quantitative method. A theoretical model is built based on thorough literature reviews of supply chain management and maritime studies, in-depth discussions with experts, item review and Q-sorting techniques to signify ambiguity or misunderstanding with the scales and to suggest modifications. The proposed model is empirically tested with survey data using 178 responses from terminal operators, shipping lines, inland transport companies, freight forwarders, ship management companies and third-party logistics providers involved in maritime logistics in the major containers ports of Busan, Gwangyang and Incheon for a comprehensive and balanced view by using structural equation modelling. With regard to the findings of the empirical research, three main constructs were successfully validated as multi-dimensional constructs. The structural paths support hypotheses that supply chain collaboration has a positive influence on collaborative advantage, and collaborative advantage has a strong contribution to port performance. However, the direct impact of supply chain collaboration on port performance is insignificant. A hierarchical approach of the mediation test and bootstrapping test found that the association between supply chain collaboration and port performance is fully mediated by collaborative advantage. In other words, the greater degree of supply chain collaboration between the port and port user enables them to gain a higher degree of collaborative advantage, and, in turn, this collaborative advantage can contribute to augmenting port performance. This thesis synthesises transaction cost theory, resource based theory and a relational view to explain how supply chain collaboration influences collaborative advantage and port performance. Its theoretical contribution expands the concept of supply chain collaboration and collaborative advantage into containerised maritime contexts, capturing the perspective of the ports and port users. Further, despite numerous maritime studies which extol the importance of collaboration between the ports and port users, no systematic approach has previously developed and validated those constructs and relationships. The various maritime logistics organisations would benefit from applying the results of this study to their supply chain collaboration practices when seeking greater collaborative advantage. The results heed practitioners in containerised maritime logistics organisations to focus on balancing the facets of supply chain collaboration to transport flows of containers seamlessly and efficiently from door-to-door, as supply chain management philosophy drives the maritim