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Moschovou, T.P.; Kapetanakis, D. Efficiency of Mediterranean Container Ports. Encyclopedia. Available online: https://encyclopedia.pub/entry/47020 (accessed on 27 July 2024).
Moschovou TP, Kapetanakis D. Efficiency of Mediterranean Container Ports. Encyclopedia. Available at: https://encyclopedia.pub/entry/47020. Accessed July 27, 2024.
Moschovou, Tatiana P., Dimitrios Kapetanakis. "Efficiency of Mediterranean Container Ports" Encyclopedia, https://encyclopedia.pub/entry/47020 (accessed July 27, 2024).
Moschovou, T.P., & Kapetanakis, D. (2023, July 20). Efficiency of Mediterranean Container Ports. In Encyclopedia. https://encyclopedia.pub/entry/47020
Moschovou, Tatiana P. and Dimitrios Kapetanakis. "Efficiency of Mediterranean Container Ports." Encyclopedia. Web. 20 July, 2023.
Efficiency of Mediterranean Container Ports
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This entry is adapted from the peer-reviewed paper 10.3390/civileng4030041

Container ports located in the wider Mediterranean area act as important maritime gateways connecting Europe, Asia and North Africa. They are considered as important and strategic nodes that facilitate intercontinental transport activities. Port performance is formed by a set of components, among which efficiency and effectiveness are two major interrelated ones.

container port terminals terminal efficiency Mediterranean

1. Introduction

Container ports play a crucial role in the supply chain and in the container transport and transshipment processes. The pivotal status and role of container ports is apparent as they support and foster a country’s economic development [1]. A key factor for ports to productively contribute to the economy is their ability to optimize their performance. Ports with a good performance increase their productivity, efficiency, reliability and therefore competitiveness [2].
Port performance is formed by a set of components, among which efficiency and effectiveness are two major interrelated ones. Efficiency is an important measure “in indicating any change in overall performance” [3]. It is expressed as a ratio of an output to an input. By the term port efficiency, the operational performance of a port and the maximization of its output production are implied while possessing specific resources and inputs [4]. It is usually measured in terms of throughput, turnaround time, operational costs and customer satisfaction. High port efficiency provides a competitive advantage to the port and the associated businesses that rely on it. Nevertheless, except efficiency, another important criterion for high port performance is effectiveness, understood as the ability of a port to meet the demand, achieve customers’ satisfaction and the desired services [5].
Container ports located in the wider Mediterranean area act as important maritime gateways connecting Europe, Asia and North Africa. They are considered as important and strategic nodes that facilitate intercontinental transport activities. European countries are the main connections for the Mediterranean with 40–50% of total extra-Mediterranean traffic, while the share of intra-Mediterranean traffic (in total Mediterranean traffic) increased from 49% to 58% in 2016 [6]. According to recent figures, the total container throughput of the top 10 Mediterranean ports increased by 133% from 2004 to 2020 [7].

2. Studies on the Efficiency of Container Ports

There are a wide range of studies in the literature that have investigated and measured the efficiency and effectiveness of container ports. Several studies have analyzed and examined the crucial role of container ports and their significance in the economy of the countries in which they are located. Other studies investigated the potential impact of privatization on the efficiency of ports and whether the entry of private entities in their operation has led to increased performance. Moreover, various research works analyzed and examined the relationship of ports’ resources with their productivity and efficiency by use of the data envelopment analysis method. An overview of previous research works is summarized in the following.

2.1. Ports, Economic Development and Privatization

The significant impacts of container ports on the economy have been analyzed from a variety of perspectives, either for their direct impact on the national gross domestic product of the country in which they are located or for being a catalyst for economic growth and development and facilitating international trade. Bottasso et al. (2014) [8] reported that for every 10% increase in port productivity, the GDP of the port’s region increases by 6–20% and by 5–18% in the neighboring regions of the port. Shan et al. (2014) [9] investigated 41 major ports in China to conclude that for every 1% increase in transported containers there is an increase of 7.6% in GDP and a positive economic impact on neighboring economies. Similarly, the exploration of the economic impact of ports in South Africa showed that a 1% drop in port activity results in a 17% economic loss [10]. The authors of [11] highlighted the strong correlation of maritime trade with a country’s GDP and showed that, due to globalization, the importance of ports has been greatly increased. Therefore, cities which host ports present a competitive advantage over those that do not, which is obvious due to their rapid development. More recently, Miambo (2021) [12] examined the impact of African ports on trade and economy, showing the strong relation of port efficiency, economic growth and trade competitiveness.
The concept of ports’ privatization and its impact on their efficiency has been studied by several scholars, including whether the ports’ performance was improved due to the change in their ownership and the involvement of the private sector. The main objective of port privatization is to improve efficiency by the inclusion of management practices. Cui and Notteboom [13] examined a number of container ports in China and found that privatization actions have improved ports’ efficiency, operation and reduced vessels’ waiting time. Similarly, Pagano et al. (2013) [14] assessed the performance and effectiveness of Panama ports during government and private sector operation and their results showed that positive effects and savings could be gained. This opinion is also shared by a number of other studies as well (interested readers can refer to [15][16]). A characteristic example of the effect of the entry of the private sector on port efficiency is the port of Piraeus in Greece. The most significant result of this investment is the port’s redevelopment into a competitive one, something that is evident from its high ranking in terms of TEUs (of 5 among European ports) [17]. Recently, the ownership of the port of Haifa in Israel changed from state-owned to private, and the process of port privatization is now completed [18]. In a non-Mediterranean area, in Brazil, talks for the continuation of the privatization process for the port of Santos have taken place once more [19]. On the other hand, there are several studies suggesting that there are cases where privatization does not always lead to more efficient ports and that the role of the public sector is significant (e.g., [3][13][20][21]).

2.2. Port Efficiency with DEA Models

Various researchers studied the efficiency of container ports, under the prism of various DEA methodologies. In the 1990s only a few scholars conducted studies applying DEA models (for example, [22][23][24]), while during and after the 2000s, the DEA technique was gradually expanded to compare ports from all over the world (e.g., [25][26][27][28][29][30][31][32][33]). For example, [25] applied DEA-CCR and DEA-Additive models to four Australian ports and twelve international east/west container ports and showed that efficiency is not necessarily related to the size and functioning of the port. This conclusion challenged [26] who supported and demonstrated, when applying the DEA-CCR-Tobit model to ports of North America, that the size (length of quay, size of terminal, etc.) of the port plays an important role in efficiency. Additionally, the authors noted the correlation between increased port productivity and the presence of rail infrastructure and hinterland requirements. The authors of [27] also applied DEA for ports’ efficiency in the area of Greece and Portugal. In 2007, ref. [34] explained that efficiency increases when resources (inputs) are limited and used in an economical way in order to produce the best possible results (outputs). Applying DEA-CCR and DEA-BCC-Robit, they concluded that DEA provides reliable results when comparing ports with similar characteristics. Three years later (2010), ref. [30] used the DEA-Panel data model for the 25 major, in terms of TEUs, east–west container ports. They concluded that port container throughput (a port’s productivity) does not have a clear link with efficiency and that more detailed research is needed for the extraction of certain results.
Recent works regarding port efficiency estimation conducted with the DEA modeling approach are [35], comparing the efficiency of container ports in the Asian and Middle East area, [36] that studied Spanish ports in relation to their efficiency levels and [37], measuring technical inefficiency of European ports. Outside the EU, some indicative studies are [38][39] that measured the operational efficiency of Vietnamese ports, [40] for Tunisian commercial ports and [41][42] for Chinese and Tunisian ports. While all the above applications used (with minimal exceptions) almost the same inputs and outputs, the author of [43] uses, among others, economic terms as outputs (revenue generated) in an attempt to find the opportunity cost of environmental regulations (OCER), i.e., the money which was spent on environmental taxes which could have been used to the benefit of each port organization. The study was applied to four ports in Taiwan for a period of 7 years. More recently, [44] also considered as output variables the revenue and profit of 14 Vietnamese seaport companies. Recent studies that apply the DEA methodology as a tool for port efficiency estimation include other outputs as well, e.g., vessel calls, number of stops at a port, total container movements, number of ships, index of liner shipping connectivity, berth productivity [45][46][47][48].
Regardless of the wide application of the DEA method to assess container ports’ efficiency, a few studies exist for the ports in the Mediterranean Basin. Among them, [49][50][51][52][53] have used port throughput in TEUs as the output variable. The current study goes a step beyond and includes, as well as container traffic (in TEUs), container volume (in tons) and revenue as outputs for the estimation of the efficiency of the 14 Mediterranean container ports and furthermore aims at their classification and efficiency estimation, according to their size and market share.

References

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