Maritime Economics & Logistics

, Volume 9, Issue 2, pp 148–171 | Cite as

The European Port Industry: An Analysis of its Economic Efficiency

  • Lourdes Trujillo
  • Beatriz Tovar
Original Article

Abstract

Because of their critical strategic role, ports have all traditionally been subject to some form of government control even if the legal form and the intensity of this control have varied across countries. The member countries of the European Union have not been different from the rest of the world in this respect. A significant difference however is the recurrent effort to integrate, in a coordinated way, the port sector in a trans-European transport network (TEN-T) through the adoption of a common legal framework. In this context, if the objective of the reforms is to ensure that port networks, integrated in combined transport networks, become competitors of the road network, the concept of port efficiency becomes central. This paper provides an overview of the evolution of the European Port Legislation and shows how comparative economic measures can be used to highlight the scope for port efficiency improvements, essential to allow short sea shipping transport to compete with road transport in Europe. To our knowledge, this paper is also the first effort of estimating technical efficiency of European Port Authorities. The average port efficiency in 2002 was estimated to be around 60%, denoting that ports could have handled 40% more traffic with the same resources.

Keywords

Technical efficiency European ports regulation Trans-European transport networks motorways of the sea 

Notes

Acknowledgements

We are grateful to A. Estache, M. M. Gonzalez, S. Jara-Díaz and G. de Rus for useful discussions, comments and suggestions. Also, we gratefully acknowledge partial financial support from the BBVA. The usual disclaimer applies.

References

  1. Adler, N, Nash, C and Niskanen, E . 2003: Barriers to efficient cost-based pricing of rail, air and water transport infrastructure in Europe. Fourth Seminar of the IMPRINT-EUROPE Thematic network “Implementing Pricing Policies in Transport: Phasing and Packaging”, Bruselas.Google Scholar
  2. ATENCO. 2001: Analysis of the cost structures of the main TEN ports. Public Final Report. Project funded by the European Commission under the transport RTD programme of the fourth Framework programme, see Section 3.6.1: North Sea container ports.Google Scholar
  3. Baird, AJ . 2000: Port privatisation: Objectives, process and financing. Ports and Harbors 45: 14–19.Google Scholar
  4. Baños-Pino, J, Coto-Millán, P and Rodríguez-Álvarez, A . 1999: Allocative efficiency and over-capitalization: An application empirical evidence. International Journal of Transport Economics 26: 181–199.Google Scholar
  5. Barros, CP . 2003: Incentive regulation and efficiency of Portuguese port authorities. Maritime Economics & Logistic 5: 55–69.CrossRefGoogle Scholar
  6. Barros, CP . 2005: Decomposing growth in Portuguese seaports: A frontier cost approach. Maritime Economics & Logistics 7: 297–315.CrossRefGoogle Scholar
  7. Barros, CP . 2006: A benchmark analysis of Italian seaports using data envelopment Análisis. Maritime Economics & Logistics 8: 347–365.CrossRefGoogle Scholar
  8. Barros, CP and Athanassiou, M . 2004: Efficiency in European seaports with DEA: Evidence from Greece and Portugal. Maritime Economics & Logistics 6: 122–140.CrossRefGoogle Scholar
  9. Battese, GE and Corra, GS . 1977: Estimation of a production frontier model: With application to the Pastoral Zone of Eastern Australia. Australian Journal of Agricultural Economics 21: 169–179.CrossRefGoogle Scholar
  10. Battese, GE and Coelli, TJ . 1988: Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data. Journal of Econometrics 38: 387–399.CrossRefGoogle Scholar
  11. Bonilla, M, Medal, A, Casasús, T and Sala, R . 2002: The traffic in Spanish ports: An efficiency analysis. International Journal of Economics Transport 29: 215–230.Google Scholar
  12. Coelli, T, Estache, A, Perelman, S and Trujillo, L . 2003a: A primer on efficiency measurement for utilities and transport regulators. WBI Development Studies. The World Bank: Washington, DC.CrossRefGoogle Scholar
  13. Coelli, T, Estache, A, Perelman, S and Trujillo, L . 2003b: Una introducción a las medidas de eficiencia. Para reguladores de servicios públicos y de transporte. Alfaomega Banco Mundial: Washington.Google Scholar
  14. Coto-Millán, P, Baños-Pino, J and Rodríguez-Álvarez, A . 2000: Economic efficiency in Spanish ports: Some empirical evidence. Maritime Policy and Management 27: 169–174.CrossRefGoogle Scholar
  15. Cuesta, RA and Orea, L . 2002: Mergers and technical efficiency in Spanish saving banks: A stochastic distance function approach. Journal of Banking & Finance 26: 2231–2247.CrossRefGoogle Scholar
  16. Cullinane, K and Song, D-W . 2003: A stochastic frontier model of the productive efficiency of Korean container terminals. Applied Economics 35: 251–267.CrossRefGoogle Scholar
  17. Cullinane, K, 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 36: 743–762.Google Scholar
  18. Cullinane, K, Song, D-W, Ji, P and Wang, T-F . 2004: An aplication of DEA windows analysis to container port production efficiency. Review of Network Economics 3: 184–206.CrossRefGoogle Scholar
  19. Cullinane, K, Wang, T-F, Song, D-W and Ji, P . 2006: The technical efficiency of container ports: Comparing data envelopment analysis and stochastic frontier analysis. Transportation Research, Part A 40: 354–374.Google Scholar
  20. De, P . 2006: Total factor productivity growth: Indian ports in the era of globalisation. Maritime Economics & Logistics 8: 366–386.CrossRefGoogle Scholar
  21. De Rus, G, Trujillo, L, Tovar, B, González, M and Román, C . 1995: Competitividad de los Puertos Españoles. Documento de Trabajo, Tribunal de Defensa de la Competencia, Madrid, España.Google Scholar
  22. Editorial. 2002: EU port policy. Maritime Policy and Management 29: 1–2.Google Scholar
  23. ESPO. 2004: Carta abierta a los Comisionados. Espo News.Google Scholar
  24. Estache, A, González, M and Trujillo, L . 2002: Efficiency gains from port reform and the potencial for yardstick competition: Lessons from México. World Development 30: 545–560.CrossRefGoogle Scholar
  25. Estache, A, Tovar, B and Trujillo, L . 2004: Sources of efficiency gains in port reform: A DEA decomposition for a Malmquist TFP index for Mexico. Utility Policy 12: 221–230.CrossRefGoogle Scholar
  26. EU Commission. 1997: Green Paper on Sea Ports and Maritime Infrastructure. COM. (97) 678 final.Google Scholar
  27. EU Commission. 1999a: The development of short-shipping in Europe: A dynamic alternative in a sustainable transport chain. COM. (99) 317 final.Google Scholar
  28. EU Commission. 1999b: Report on the implementation of the action framework on intermodality and the intermodal carriage of goods in the European Union. COM. (99) 519 final.Google Scholar
  29. EU Commission. 2001a: Proposal for a Directive of the European Parliament and of the Council on Market Access to Port Services. EU Commission: Brussels.Google Scholar
  30. EU Commission. 2001b: On public financing and charging practices in the community sea port sector, SEC (2001) 324, 14/02/2001, Brussels.Google Scholar
  31. EU Comisión. 2003: Comunicación de la Comisión. Programa de fomento del tráfico de cabotaje, COM/2003/0595 final.Google Scholar
  32. EU Commission. 2004a: TEN-T Guidelines, April 2004.Google Scholar
  33. EU Commission. 2004b: Proposal for a Directive of the European Parliament and of the Council on Market Access to Port Services, COM/2004/0654 final-COD 2004/0240.Google Scholar
  34. EU Commission. 2004c: Comunicación de la Comisión al Consejo, al Parlamento Europeo, al Comité Económico y Social Europeo y al Comité de las Regiones sobre el transporte marítimo de corta distancia, (SEC(2004)875) COM/2004/0453 final.Google Scholar
  35. Everett, S . 1996: Corporatisation strategies in Australian ports: Emerging issues. IAME 1996 conference shipping, ports and logistics services: Solutions for global issues. IAME: Vancouver.Google Scholar
  36. Fleming, D and Baird, A . 1999: Comment. Some reflections on port competition in the United States and Western Europe. Maritime Policy and Management 26: 383–394.CrossRefGoogle Scholar
  37. Friedrichsen, C . 1999: Benchmarking of ports. Possibilities for increased efficiency of ports. Transport benchmarking. Methodologies, applications and data needs. European Conference of Ministers of Transport, European Commission: Paris.Google Scholar
  38. González, M . 2004: Eficiencia en la provisión de servicios de infraestructura portuaria: una aplicación al tráfico de contenedores en España. Tesis doctoral, Universidad de Las Palmas de Gran Canaria.Google Scholar
  39. González, M and Trujillo, L . 2004: Reforms and infrastructure efficiency in Spain's container ports. 3rd Conference on Applied Infrastructure Research, Berlín.Google Scholar
  40. González, M and Trujillo, L . 2007: Efficiency measurement in port industry: A survey of the empirical evidence. Working paper series, Departamento de Análisis Económico Aplicado, Universidad de Las Palmas de Gran Canaria.Google Scholar
  41. Haralambides, HE, Ma, S and Veenstra, AW . 1997: World-wide experiences of port reform. In: Meersman, H, Van de Voorde, E. (ed). Transforming the Port and Transportation Business. Acco: Leuven. pp. 107–143.Google Scholar
  42. Haralambides, HE and Veenstra, AW . 2002: Port pricing. In: Grammenos, CT. (ed). The Handbook of Maritime Economics and Business. LLP: London and Hong Kong. pp. 782–802.Google Scholar
  43. Haralambides, HE, Verbeke, A, Musso, E and Bennachio, M . 2001: Port financing and pricing in the European union: Theory, politics and reality. International Journal of Maritime Economics 3: 368–386.CrossRefGoogle Scholar
  44. Liu, Z . 1995: The comparative performance of public and private enterprise. The case of British port. Journal of Transport Economics and Policy 29: 263–274.Google Scholar
  45. Martín, M . 2002: El sistema portuario español: regulación, entorno competitivo y resultados. Una aplicación del análisis envolvente de datos Ph.D. Thesis, Universitat Rovira I Virgili.Google Scholar
  46. Martínez Budría, E, Díaz Armas, R, Navarro Ibañez, M and Ravelo Mesa, T . 1999: A study of the efficiency of Spanish port authorities using data envelopment analysis. International Journal of Transport Economics 26: 237–253.Google Scholar
  47. Notteboom, TE, Coeck, C and Van den Broeck, J . 2000: Measuring an explaining relative efficiency of container terminals by means of Bayesian stochastic frontier models. International Journal of Maritime Economics 2: 83–106.CrossRefGoogle Scholar
  48. Notteboon, TE and Winkelmans, W . 2001: Reassessing public sector involvement in European Seaports. International Journal of Maritime Economics 3: 242–259.CrossRefGoogle Scholar
  49. Ritter, C and Simar, L . 1997: Pitfalls of normal gamma stochastic frontier models. Journal of Productivity Analysis 8: 121–129.CrossRefGoogle Scholar
  50. Rodríguez-Álvarez, A, Tovar, B and Trujillo, L . 2005: Firm and time varying technical and allocative efficiency and application for port cargo handling firms. FUNCAS Working Paper no. 201, Madrid.Google Scholar
  51. Simar, L and Wilson, P . 2000: A general methodology for boostraping in nonparametric frontier models. Journal of Applied Statistics 27: 779–802.CrossRefGoogle Scholar
  52. Suykens, F . 1986: Ports should be efficient (even when this means that some of them are subsidized). Maritime Policy and Management 13: 105–126.CrossRefGoogle Scholar
  53. Suykens, F and Van de Voorde, E . 1998: A quarter of a century of port management in Europe: Objectives and tools. Maritime Policy and Management 25: 251–261.CrossRefGoogle Scholar
  54. Tongzon, JL and Heng, W . 2006: Port privatization, efficiency and competitiveness: Some empirical evidence from container ports (terminals). Transportation Research, Part A 39: 405–424.Google Scholar
  55. Tovar, B, Trujillo, L and Jara-Díaz, S . 2004: Organization and regulation of the Port Industry: Europe and Spain. In: Coto-Millan, P. (eds). Essays on Microeconomics and Industrial Organisation 2nd Edition. Physica-Verlag, A Springer-Verlag Company: Germany. pp. 189–205.CrossRefGoogle Scholar
  56. Trujillo, L and Nombela, G . 2000: Seaport. In: Estache, A and de Rus, G. (ed). Privatization and Regulation of Transport Infrastructure. Guidelines for Policymakers and Regulators. The World Bank: Washington, DC. pp. 113–170.Google Scholar
  57. Valentine, VF and Gray, R . 2001: The measurement of port efficiency using data envelopment analysis. 9th World Conference on Transport Research, Seoul, Korea.Google Scholar
  58. Wang, T-F and Cullinane, K . 2006: The efficiency of European container terminals and implications for supply chain management. Maritime Economics & Logistics 8: 82–99.CrossRefGoogle Scholar
  59. World Bank. 2007: Port Reform Toolkit: Effective Decision Support for Policy Makers and Practitioners, 2nd Edition. World Bank: Washington, DC, USA.Google Scholar

Copyright information

© Palgrave Macmillan Ltd 2007

Authors and Affiliations

  • Lourdes Trujillo
    • 1
    • 2
  • Beatriz Tovar
    • 1
  1. 1.Research Group on Infrastructure and Transport Economics, Universidad de Las Palmas de Gran CanariaSpain
  2. 2.CCRP, City University of LondonUK

Personalised recommendations