Maritime Economics & Logistics

, Volume 8, Issue 1, pp 82–99 | Cite as

The Efficiency of European Container Terminals and Implications for Supply Chain Management

  • Teng-Fei Wang
  • Kevin Cullinane
Original Article


This paper investigates the efficiency of container terminals within the context of global supply chain management. The efficiency and scale properties of 104 of Europe's container terminals with annual throughput of over 10,000 TEUs1 in 2003, distributed across 29 European countries, are derived using data envelopment analysis. The main findings are that significant inefficiency pervades most of the terminals under study and that large-scale production tends to be associated with higher efficiency. Terminals in the British Isles and Western Europe were found to be the most efficient, compared to their counterparts with the lowest efficiency in Scandinavian and Eastern European countries.


Efficiency supply chain management European container ports data envelopment analysis (DEA) scale efficiency 



We are grateful to the Chartered Institute of Logistics and Transport for providing partial funding for this project in the form of the 2004/05 Logistics and Transport Seed-Corn Research Grant. The comments of an anonymous referee are also much appreciated.


  1. Aigner, D, Lovell, C and Schmidt, P . 1977: Formulation and estimation of stochastic frontier production function models. Journal of Econometrics 6: 21–37.CrossRefGoogle Scholar
  2. Alderton, P . 1999: Port management and operation. LLP Reference Publication: London.Google Scholar
  3. Banker, RD, Charnes, A and Cooper, WW . 1984: Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management Science 30: 1078–1092.CrossRefGoogle Scholar
  4. Barros, CP and Athanassiou, M . 2004: Efficiency in European seaports with DEA: Evidence from Greece and Portugal. Maritime Economics and Logistics 6: 122–140.CrossRefGoogle Scholar
  5. Beresford, AKC, Gardner, BM, Pettit, SJ, Naniopoulos, A and Wooldridge, CF . 2004: The UNCTAD and WORKPORT models of port development: Evolution or revolution? Maritime Policy and Management 31: 93–107.CrossRefGoogle Scholar
  6. Bichou, K and Gray, R . 2004: A logistics and supply chain management approach to port performance measurement. Maritime Policy and Management 31: 47–67.CrossRefGoogle Scholar
  7. Cahoon, S and Hecker, R . 2005: Seaports in the new economy: Using services marketing strategies to increase cargo throughput in a hypercompetitive environment. Proceedings of The International Association of Maritime Economists Annual Conference, Cyprus, 22–25 June.Google Scholar
  8. Charnes, A, Cooper, WW and Rhodes, E . 1978: Measuring the efficiency of decision making units. European Journal of Operational Research 2: 429–444.CrossRefGoogle Scholar
  9. Cooper, WW, Seiford, LM and Tone, K . 2000: Data envelopment analysis: A comprehensive text with models, applications, references and DEA-solver software. Kluwer Acaemic Publishers: Boston.Google Scholar
  10. Coto-Millan, P, Banos-Pino, J and Rodriguez-Alvarez, A . 2000: Economic efficiency in Spanish ports: Some empirical evidence. Maritime Policy and Management 27: 169–174.CrossRefGoogle Scholar
  11. Cullinane, KPB . 2000: The competitive position of the port of Hong Kong. The Journal of the Korean Association of Shipping Studies 31: 45–61.Google Scholar
  12. Cullinane, KPB . 2002: Visions from Asia on the future evolution of the maritime and port industries. Invited keynote speech to the ITMMA Port & Maritime Symposium, The Maritime and Port Industry in Transition: Solutions Beyond Economies of Scale and Scope, Antwerp: Belgium. April 18–20.Google Scholar
  13. Cullinane, KPB . 2005: The container shipping industry and the impact of China's accession to the WTO. In: Cullinane, KPB (ed). Shipping Economics, Research in Transportation Economics, Vol. XII, Elsevier: Amsterdam. pp. 221–245.Google Scholar
  14. Cullinane, KPB and Khanna, M . 1999: Economies of scale in large container ships. Journal of Transport Economics and Policy 33: 185–208.Google Scholar
  15. Cullinane, KPB and Khanna, M . 2000: Economies of scale in large containerships: Optimal size and geographical implications. Journal of Transport Geography 8: 181–195.CrossRefGoogle Scholar
  16. Cullinane, KPB, Ji, P and Wang, T-F . 2005a: The relationship between privatization and DEA estimates of efficiency in the container port industry. Journal of Economics and Business 57: 433–462.CrossRefGoogle Scholar
  17. Cullinane, KPB and Song, D-W . 2003: A stochastic frontier model of the productive efficiency of Korean container terminals. Applied Economics 35: 251–267.CrossRefGoogle Scholar
  18. Cullinane, KPB, Song, D-W and Gray, R . 2002: A stochastic frontier model of the efficiency of major container terminals in Asia: Assessing the influence of administrative and ownership structures. Transportation Research Part A – Policy and Practice 36: 743–762.CrossRefGoogle Scholar
  19. Cullinane, KPB, Song, D-W, Ji, P and Wang, T-F . 2004a: An application of DEA Windows analysis to container port production efficiency. Review of Network Economics 3: 186–208.CrossRefGoogle Scholar
  20. Cullinane, KPB, Song, D-W and Wang, T-F . 2005b: A comparison of mathematical programming approaches to estimating container port production efficiency. Journal of Productivity Analysis 24: 73–92.CrossRefGoogle Scholar
  21. Cullinane, KPB, Wang, T-F and Cullinane, SL . 2004b: Container terminal development in mainland China and its impact on the competitiveness of the port of Hong Kong. Transport Reviews 24: 33–56.CrossRefGoogle Scholar
  22. Cullinane, KPB, Wang, T-F, Song, D-W and Ji, P . 2006: A comparative analysis of DEA and SFA approaches to estimating the technical efficiency of container ports. Transportation Research A: Policy and Practice.Google Scholar
  23. De Neufville, R and Tsunokawa, K . 1981: Productivity and returns to scale of container ports. Maritime Policy and Management 8: 121–129.CrossRefGoogle Scholar
  24. Goss, RO . 1990: Economic policies and seaports – part 2: The diversity of port policies. Maritime Policy and Management 17: 221–224.CrossRefGoogle Scholar
  25. Greene, WH . 2003: Econometric analysis. 5th Edition, Prentice-Hall: Englewood Cliffs, New Jersey.Google Scholar
  26. Heaver, T . 1995: The Implications of increased competition among ports for port policy and management. Maritime Policy and Management 22: 125–133.CrossRefGoogle Scholar
  27. Heaver, TD . 2001: The evolving roles of shipping lines in international logistics. International Journal of Maritime Economics 4: 210–230.CrossRefGoogle Scholar
  28. Heaver, T, Meersman, H and van de Voorde, E . 2001: Co-operation and competition in international container transport: Strategies for ports. Maritime Policy and Management 28: 293–305.CrossRefGoogle Scholar
  29. Heaver, T, Meersman, H, Moglia, F and van de Voorde, E . 2000: Do mergers and alliances influence European shipping and port competition? Maritime Policy and Management 27: 363–373.CrossRefGoogle Scholar
  30. Liu, Z . 1995: The comparative performance of public and private enterprises: The case of British ports. Journal of Transport Economics and Policy 29: 263–274.Google Scholar
  31. Marlow, PB and Paixão, AC . 2004: Measuring lean ports' performance. International Journal of Transport Management 1: 189–202.CrossRefGoogle Scholar
  32. Martine Zarzoso, I, Perez Garcia, E, San Juan Lucas, E and Suarez Burguet, C . 2004: How important are transport costs for international trade?: An empirical study for Spanish exporting sectors. International Association of Maritime Economists Annual Conference, Izmir, 30 June–2 July.Google Scholar
  33. 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 XXVI: 237–253.Google Scholar
  34. Miyashita, K . 2005: Logistics strategy of Japanese ports: The case of Kobe and Osaka. In: Lee, T-W and Cullinane, KPB (eds). World Shipping and Port Development. Palgrave-Macmillan: Basingstoke. pp. 181–198.Google Scholar
  35. Norman, M and Stoker, B . 1991: Data envelopment analysis, the assessment of performance. John Wiley & Sons Ltd: Chichester, England.Google Scholar
  36. Notteboom, T . 1997: Concentration and load centre development in the European container port system. Journal of Transport Geography 5: 99–115.CrossRefGoogle Scholar
  37. Notteboom, T, Coeck, C and van den Broeck, J . 2000: Measuring and explaining the relative efficiency of container terminals by means of Bayesian Stochastic Frontier models. International Journal of Maritime Economics 2: 83–106.CrossRefGoogle Scholar
  38. Notteboom, T and Winkelmans, W . 2001: Structural changes in logistics: How will port authorities face the challenges. Maritime Policy and Management 28: 71–89.CrossRefGoogle Scholar
  39. Paixão, AC and Marlow, PB . 2003: Fourth generation ports – a question of agility. International Journal of Physical Distribution and Logistics Management 33: 355–376.CrossRefGoogle Scholar
  40. Perloff, JM . 2004: Microeconomics. 3rd Edition, Pearson: Boston.Google Scholar
  41. Robinson, R . 2002: Ports as elements in value-driven chain systems: The new paradigm. Maritime Policy and Management 29: 241–255.CrossRefGoogle Scholar
  42. Robinson, R . 2003: Port authorities: Defining functionality within a value-driven chain paradigm. Proceedings of International Association of Maritime Economists Annual Conference, Busan, September, pp. 654–674.Google Scholar
  43. Robinson, R . 2005: Capturing value in port-oriented landside logistics pathways: Critical issues for an effective policy framework. Proceedings of International Association of Maritime Economists Annual Conference, Cyprus, 22–25 June.Google Scholar
  44. Roll, Y and Hayuth, Y . 1993: Port Performance comparison applying data envelopment analysis (DEA). Maritime Policy and Management 20: 153–161.CrossRefGoogle Scholar
  45. Slack, B . 1993: Pawns in the game: Ports in a global transportation system. Growth and Change 24: 579–588.CrossRefGoogle Scholar
  46. Tavares, G . 2002: A bibliography of data envelopment analysis (1978–2001), RUTCOR research report RRR 01–02 (January). Rutgers University: Piscatway, NJ.Google Scholar
  47. Tongzon, J . 2001: Efficiency measurement of selected Australian and other international ports using data envelopment analysis. Transportation Research Part A: Policy and Practice 35: 113–128.Google Scholar
  48. Tongzon, J . 2005: Key success factors for transhipment hubs: The case of the port of Singapore. In: Lee, T-W and Cullinane, KPB (eds). World Shipping and Port Development. Palgrave-Macmillan: Basingstoke. pp. 162–180.Google Scholar
  49. Tongzon, J and Heng, W . 2005: Port privatization, efficiency and competitiveness: Some empirical evidence from container ports (terminals). Transportation Research Part A – Policy and Practice 39: 405–424.CrossRefGoogle Scholar
  50. Turner, H, Windle, R and Dresner, M . 2004: North American container port productivity: 1984–1997. Transportation Research Part E – Logistics and Transportation Review 40: 339–356.CrossRefGoogle Scholar
  51. UNCTAD. 1992: Port marketing and the third generation port, TD/B C.4/AC.7/14. UNCTAD: Geneva.Google Scholar
  52. UNCTAD. 1999: Technical note: The fourth generation port. UNCTAD Ports Newsletter 19: 9–12.Google Scholar
  53. Valentine, VF and Gray, R . 2001: The measurement of port efficiency using data envelopment analysis. Proceedings of the 9th World Conference on Transport Research, Seoul, South Korea, 22–27 July.Google Scholar
  54. Wang, T-F and Cullinane, KPB . 2004: Industrial concentration in container ports. International Association of Maritime Economists Annual Conference, Izmir, 30 June–2 July.Google Scholar
  55. Wang, T-F, Cullinane, KPB and Song, D-W . 2005: Container port production and economic efficiency. Palgrave Macmillan: Basingstoke.CrossRefGoogle Scholar
  56. Weston, R and Robinson, R . 2005: Value migration and profit pools in port-oriented freight systems: The implications for new patterns of efficiency. International Association of Maritime Economists Annual Conference, Cyprus, 22–25 June.Google Scholar
  57. Winkelmans, W . 2004: The socio-economic value of seaports in the European Union. The European Sea Ports Conference 2004: European Sea Ports in a Dynamic Market – Ports and the EU Agenda, Rotterdam, 17–18 June.Google Scholar

Copyright information

© Palgrave Macmillan Ltd 2006

Authors and Affiliations

  • Teng-Fei Wang
    • 1
  • Kevin Cullinane
    • 2
  1. 1.International Shipping and Logistics Group, Plymouth Business School, University of Plymouth, Drake CircusPlymouthUK
  2. 2.Marine Transport and Management, School of Marine Science and Technology, Armstrong Building, University of Newcastle upon TyneNewcastleUK

Personalised recommendations