Efficiency Measurement of US Ports Using Data Envelopment Analysis

Container transportation plays a key role in the process largely because of the numerous technical and economic advantages it provides over traditional methods of water transportation. Compared with traditional port operations, containerization has greatly improved performance of port production. Many container ports no longer enjoy the freedom yielded by a monopoly over the handling of cargo from within their vicinity. Instead, not only they are concerned with whether they can physically handle cargo, but also whether they can compete for that cargo. This paper aims to analyze port productivity using Data Envelopment Analysis technique. Two main results are presented. First, an efficient frontier or a set of the best practice ports is identified, which inefficient ports may want to emulate. Second, the sources and extent of inefficiency on which an inefficient port should focus in order to improve their operations are determined.