Advertisement

Maritime Economics & Logistics

, Volume 5, Issue 2, pp 199–218 | Cite as

Port Efficiency and International Trade: Port Efficiency as a Determinant of Maritime Transport Costs

  • Ricardo J Sánchez
  • Jan Hoffmann
  • Alejandro Micco
  • Georgina V Pizzolitto
  • Martín Sgut
  • Gordon Wilmsmeier
Original Article

Abstract

This paper examines the determinants of waterborne transport costs, with particular emphasis on the efficiency at port level. Its main contribution is (1) to generate statistically quantifiable measures of port efficiency from a survey of Latin American common user ports, and (2) to estimate a model of waterborne transport costs, including the previously generated port efficiency measures as explanatory variables. In order to incorporate different port efficiency measures from the survey, we use principal component analysis (PCA). Our estimations show that the specified variables in the model explain a great proportion of the change in waterborne transport costs. With regard to port efficiency, the result is especially important for one of the port efficiency measures obtained through PCA with an estimated elasticity equivalent to that of distance. Other explanatory variables which show to be statistically significant are the monthly liner service availability, distance, and the goods' value per ton. The conclusions are relevant for policy makers as they show and quantify that port efficiency is a relevant determinant of a country's competitiveness – and in this respect, there still exist big differences among Latin American countries. Unlike most other relevant variables, port efficiency can be influenced by public policies.

Keywords

Port efficiency multivariate analysis freight costs Latin America 

References

  1. Australian Productivity Commission. 1998: International benchmarking of the Australian waterfront. AUSINFO: Canberra.Google Scholar
  2. Baños, J, Coto, P and Rodriguez, A . 1999: Allocative efficiency and over-capitalisation. International Journal of Transport Economics 2: 201–221.Google Scholar
  3. Clark, X, Dollar, D and Micco, A . 2001: Maritime transport costs and port efficiency. Mimeo, World Bank, February.Google Scholar
  4. Coto, P, Baños, J and Rodriguez, A . 2000: Economic efficiency in Spanish ports: some empirical evidence. Maritime Policy and Management 27: 2.Google Scholar
  5. ECLAC. 2002: Globalization and development. Santiago, April.Google Scholar
  6. Estache, A, González, M and Trujillo, L . 2001: Efficiency gains from port reform and the potential for yardstick competition. Mimeo. World Bank, Washington DC.CrossRefGoogle Scholar
  7. Fink, C, Mattoo, A and Neagu, IC . 2000: Trade in international maritime services: how much does policy matter?. Mimeo, World Bank, Washington, DC.Google Scholar
  8. Fuchsluger, J . 2000: Maritime transport costs in South America. Masters Theses, University of Karlsruhe, Karlsruhe.Google Scholar
  9. Gorman, M . 2002: Revisiting the JIT paradigm. Ascet 4: 104.Google Scholar
  10. Gosh, B and De, P . 2000: Impact of performance indicators and labour endowment on traffic: empirical evidence from Indian ports. International Journal of Maritime Economics, II: 259–281.CrossRefGoogle Scholar
  11. Hoffmann, J . 2001: Latin American ports: results and determinants of private sector participation. International Journal of Maritime Economics 3: 221–230.CrossRefGoogle Scholar
  12. Hoffmann, J . 2002: The cost of international transport, and integration and competitiveness in Latin America and the Caribbean. ECLAC FAL Bulletin 191: 3.Google Scholar
  13. Hummels, D . 2000: Have international transportation costs declined?. Mimeo, Chicago.Google Scholar
  14. Kumar, S and Hoffmann, J . 2002: Globalization: The Maritime Nexus. Maritime business and economics. LLP: London, November.Google Scholar
  15. Limao, A and Venables, J . 2001: Infrastructure, geographical disadvantage and transport costs. World Bank Economic Review No. 15, Washington.Google Scholar
  16. Martinez-Budria, E, Diaz-Armas, R, Navarro-Ibanez, M and Ravelo-Mesa, T . 1999: A study of the efficiency of Spanish port authorities using data envelopment analysis. International Journal of Transport Economics 2: 263–281.Google Scholar
  17. Martínez-Zarzoso, I, García-Menéndez, L and Suárez-Burguet, C . 2002: The impact of transport costs on international trade: the case of Spanish ceramic exports. Conference Proceedings, International Association of Maritime Economist, Annual Meeting and Conference. Panama, November.Google Scholar
  18. Micco, A and Pérez, N . 2001: Maritime transport costs and port efficiency. Inter-American Development Bank, IADB Annual Meeting, Santiago.Google Scholar
  19. Radelet, S and Sachs, J . 1998: Shipping costs, manufactured exports, and economic growth. Mimeo, Harvard.Google Scholar
  20. Redding, S and Venables, J . 2001: Economic geography and international inequality. Mimeo, London.Google Scholar
  21. Roll, Y and Hayuth, Y . 1993: Port performance comparison applying data envelopment analysis (DEA). Maritime Policy and Management, 20: 195–217.CrossRefGoogle Scholar
  22. Tongzon, J . 2001: Efficiency measurement of selected Australian and other international ports using data envelopment analysis. Transportation Research Part A: Policy and Practice 35: 314.Google Scholar
  23. UNCTAD. 2002: Review of maritime transport. Geneva.Google Scholar
  24. Valentine, VF and Gray, R . 2001: The measurement of port efficiency using data envelopment analysis. World Conference on Transport Research, Seoul, July.Google Scholar
  25. Wang, TF, Song, DW and Cullinane, K . 2002: The applicability of data envelopment analysis to efficiency measurement of container ports. Conference proceedings, International Association of Maritime Economist, Annual Meeting and Conference. Panama, November.Google Scholar

Copyright information

© Palgrave Macmillan Ltd 2003

Authors and Affiliations

  • Ricardo J Sánchez
    • 1
  • Jan Hoffmann
    • 2
  • Alejandro Micco
    • 3
  • Georgina V Pizzolitto
    • 1
  • Martín Sgut
    • 1
  • Gordon Wilmsmeier
    • 2
  1. 1.Austral UniversityArgentina
  2. 2.Economic Commission for Latin American and the CaribbeanSantiagoChile
  3. 3.Inter-American Development BankWashingtonUSA

Personalised recommendations