Application of Multiplicative Two-Stage Network Data Envelopment Analysis in Measuring and Improving the Efficiency of Container Ports in Southeast Asia

Abstract

In response to the surge in container volumes, Southeast Asian nations have embarked on multiple port development projects. Considering the significant costs associated with port infrastructure, conducting a meticulous efficiency evaluation becomes imperative to determine the suitable direction for port development and guarantee the success of these investments. This study proposes a comprehensive framework using a multiplicative two-stage network data envelopment analysis model to investigate the efficiency of major container ports in Southeast Asia. It assesses how the technical efficiency of each stage within the port operation contributes to the overall technical efficiency of the port. Furthermore, the technical efficiency of each stage is measured based on two components: pure technical efficiency and scale efficiency. The key findings of the study can be summarized as follows. Firstly, most container ports in Southeast Asia exhibited relatively low levels of technical efficiency. Secondly, the underperformance was primarily caused by technical inefficiency in the building capacity stage, rather than the utilizing capacity stage. Thirdly, inadequate scale operation emerged as a significant issue for most ports. Based on the empirical results, the container ports are classified into four groups, and specific recommendations are provided for the development direction of each port group.