Efficiency Analysis and Ranking of Major Container Ports in Northeast Asia: An Application of Data Envelopment Analysis

The Northeast Asia is emerging as the third hub of world economy next to EU and NAFTA. Neighboring countries in the region enter into keen competition to take the lead in global supply chain network. This competition is accelerated by the fast growing Chinese economy. Under these circumstances, it is necessary for container ports not only to extend the facilities but also to improve the operational efficiency for gaining competitive advantage over their rivals. By applying DEA models, we attempt to measure the operational efficiency of the 19 major container ports in the Northeast Asia. This analysis of operational efficiency reveals the causes of inefficient operation and also suggests how to overcome the drawbacks. An additional analysis for ranking the container ports was conducted using the super-efficiency model. According to the results of this study, eight container ports are operated efficiently among which Hongkong is ranked top as the most efficient port in the Northeast Asia. Two Korean container ports, both Busan and Gwangyang show relatively low operational efficiency compared to their rival ports. To become efficient, they need to improve either cut their labor and capital (inputs) or increase their TEU (output) of the two ports.