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Efficiency of Middle Eastern and East African Seaports: Application of DEA Using
Window Analysis
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Adli Mustafa
School of Mathematical Sciences,Universiti Sains Malaysia
11800 Pulau Pinang, Malaysia
E-mail: adli@cs.usm.my
Abstract
The efficiency of 22 seaports in the Middle East and East African region were
evaluated. Two separate analyses were performed based on data collected for 6 years
(2000–2005), Standard Data Envelopment Analysis (DEA) method was used in the first
analysis and DEA window analysis was used in second analysis. By using both methods,
better insight into the efficiency situation at hand is gathered; the advantages and
disadvantages of the methods are highlighted.
Keywords: Middle East and East African Seaports, Data Envelopment Analysis,
Windows Analysis, Seaports Efficiency, Performance Measurement of
Containers Ports, Transshipment.
1. Introduction
The maritime transport services have benefited the economy of many regions of the world because
more than 80 percent of the world trade volume is carried by ships. Maritime transport is thus an
efficiency facilitator of the world trade (Haralambides et al., 2001). This role has become more
apparent and crucial in today’s expanded and diversified world trade system. Maritime transport was,
and currently is, the backbone of development for many countries (Cullinane et al., 2002). The
598 Ahmed Salem Al-Eraqi, Adli Mustafa, Ahamad Tajudin Khader and Carlos Pestana Barros
advantage of maritime transport is the speed, comfort, safety, and the possibility and ability to handle
heavy traffic of goods and passengers at relatively low prices.
Seaports, serving as the interface between maritime and inland transportation, play a significant
role in the economic development of a region. Production capabilities and the performance
measurement of seaports have always been a major issue in seaport management. Besides functioning
as a powerful management tool for seaport operators, seaport performance measurement also functions
as an important input for regional and national seaport planning and operations. One of the important
aspects Constant of seaport performance measurement is the efficiency and for evaluation of efficiency
the popular method of Data Envelopment Analysis (DEA) is used.
Previously, many studies dealing with seaports efficiency using DEA have been carried out;
however, most of these compare the efficiency of seaports in the European countries (Trujillo & Tovar,
2007; Barros, 2006; Barros & Manolis, 2004; Cullinane et al., 2006) with a few dealing with some
Asian countries and Australia (Cullinane et al., 2005; Lee, 2005 and Tongzon 2005 ). Nevertheless,
none of the studies conducted so far have focused on seaports in the Middle Eastern and East African
countries. This paper focuses on these regions which are strategically located in the middle of
international maritime trade route between the East and the West. The aim of this paper is to compare
two stages of analysis; the first stage uses cross-section method and the second panel data.
The present paper is organised as follows: Section 2 presents Port Characteristics and Section 3
the Literature Survey, while the Models are presented in Section 4. In Section 5, Data and Statistical
Analysis are presented Section 6 includes the Results and finally in Section 7 the Discussion is
presented.
2. Port Characteristics
Over the past few decades, seaport industry in many countries of the world has witnessed remarkable
development. This is obvious, particularly in the East African countries, such as Sudan, Eritrea,
Djibouti, Kenya, and Tanzania, and the Middle Eastern countries, particularly Saudi Arabia, Yemen,
Oman, the United Arab Emirates, and Iran. These countries possess seaports which are strategically
located in the international maritime trade route between the East and the West (Figure 1) and are
considered as middle distance seaports. Goods carried from Europe and Far East/Australia and vice
versa can be exchanged and transhipped to all countries in the Middle East, Red Sea, and East Africa.
Since the olden days, these seaports have provided services for the regional coasters and as time went
by, they have developed to be among the important maritime international trade centres in the region.
The geographically strategic location of some of these seaports, have also encouraged modern
container vessels to make short duration calls upon them (e.g. shipping lines operating along
Asia/Europe route, Asia/Mediterranean route and Asia/US East Coast route). These seaports and their
characteristics are displayed in Table 1.
Efficiency of Middle Eastern and East African Seaports: Application of
DEA Using Window Analysis 599
No. Port Berth Length Equipment Area M sq Ship Call Total Tons
1 Dubai Emirates (B) 5519 24 2209000 3916 12971235
2 Jeddah Saudi (B) 1330 26 50000 2049 12292704
3 Salalah Oman (B) 4296 14 341292 1506 1367404
4 Dammam Saudi (B) 1780 54 1032692 1653 19874564
5 Kuwait (B) 1750 23 538898 1636 3836840
6 Aden Yemen (B) 4875 176 1948610 6352 66541268
7 Mombasa Kenya (B) 4055 12 1586458 3148 16106155
8 Khor Fakkan Sharjah (B) 320 2 250567 398 1239645
9 Yanbu Saudi (M) 2004 34 843015 2463 14762086
10 Hodeidah (M) 1165 18 1321000 2042 8338290
11 Jubail Saudi (M) 8454 39 1843720 2782 16210109
12 Djibouti (M) 4800 9 1438800 1462 8556476
13 Dar es Salaam Tanzania (M) 1930 9 727000 1466 10720699
14 Sudan (M) 11200 114 2500000 4365 39245363
15 Mascut Oman (M) 2254 44 540253 2431 5102331
16 Asmara Eritrea (M) 1650 68 114117 1670 13916858
17 Khalid Sharjah (M) 2444 63 46864 1615 6232654
18 Bander Abbas Iran (M) 381 13 20000 195 334189
19 Mukalla Yemen (S) 385 6 400000 174 276681
20 Assab Eritrea (S) 1140 35 275319 819 535736
21 Tanga Tanzania (S) 1120 18 204057 1602 1509422
22 Mtwara Tanzania (S) 1795 20 151200 2165 6290892
B: Big port, M: Medium port and S: small port
3. Literature Survey
There is extensive literature on DEA, applied to a wide diversity of economic fields and in particular to
seaports transportation. Cullinane et al. (2005) used DEA to highlight the major objective of port
privatisation to improve the efficiency of this sector, with data of the container throughput as output
and area and length terminal, quay crane, yard crane, straddle as inputs. These authors concluded that
public and private/public ports perform better than public/private and private ports.
Barros (2006) evaluated the performance of Italian seaports for the 2002 -2003 period using
DEA with Charnes, Cooper and Rhodes (CCR) model and Banker, Charnes and Cooper (BCC) model,
to analyze 24 seaports. Barros (2006) used multiple efficiency models, such as DEA CCR, BCC, Cross
efficiency DEA and DEA Super efficiency for Italian seaports, whereas previously published articles
were limited to one or two analysis models. Because of this, the general conclusion emerged that the
Italian companies display relatively high management skills, with most of them being Variable Return
to Scale (VRS) efficient. Barros (2006) provides benchmarks to improve the functioning of the port in
terms of efficiency.
Cullinane et al. (2004) applied window analysis in order to evaluate the efficiency score of the
world’s major container ports over time by using panel data and cross-section data for 2003. They
concluded that the cross-section method is poor because it does not provide details of port
performance, whereas the panel data with window analysis reflect a variation of the absolute
performance of a port over time, and the relative performance of that port in comparison to the others
at the same time.
Barros & Manolis (2004) compared the efficiency of ports of two European countries, Greece
and Portugal. They took data from several ports of each of these countries during the 1998-2000
periods. Their paper is intended to evaluate the efficiency of major seaports in two small European
countries using the CCR and BCC models.
Wang & Cullinane (2006) focused on measuring the efficiency of container terminals in
Europe. They proposed DEA with CCR and BCC models to evaluate efficiency. They concluded that
management skills are crucial and emerge as a core in terms of business competence.
Cullinane et al. (2006) contribute richly to this research by supporting existing research which
leads to an estimates approach of relative efficiency in this active private sector of ports. Their study
focuses on a sample comprising 69 of Europe's container terminals with annual throughput of over
10,000 TEUs for the year 2002.
n
s.t. ∑λ j =1
j xij ≥ xik i=1, 2… m;
(1)
n
∑λ
j =1
j y rj ≤ φ k y rk r=1,2,…,s;
λj ≥ 0 ∀ j.
And 2) BCC Model, (Banker, Charnes and Cooper 1984) is defined by adding equations (2) to
expression (1) above.
n
∑λ
j =1
j =1 (2)
Where n is number of DMU, φk is the efficiency of the kth DMU, xij are i-th inputs of the j-th
DMU, yrj are the outputs of j-th DMU and λj is weight of j-th DMU. The DEA-technique requires a
large number of medium-sized linear programming problems to be solved. The two models, described
previously, the first is called CCR model (constant return to scale) which is a scale efficiency and
technical efficiency, and the second is called BCC model (variable return to scale) which is a pure
technical and scale efficiency (Fare et al. 1994). That output-oriented efficiency problem can be written
in the form of N linear programming system (Cullinane et al. 2004). The technical efficiencies derived
from the DEA-CCR and DEA-BCC models are frequently used to obtain a measure of scale for DMU,
given by SEk=UCCRk / UBCCk (William et al.2000), where UCCR_k and UBCC_k are the technical efficiency
measures for DMU k derived from applying the DEA-CCR and DEA-BCC models respectively. CCR
score is called technical efficiency (TE), BCC called pure technical efficiency (PTE), and scale
efficiency noted by (SE) with TE = PTE * SE, if SEk =1 then the score is efficiency (constant return to
scale) otherwise the score is inefficiency if SEk <1(Increasing or decreasing return to scale). The
constant return to scale means that the firm able to operate the inputs and outputs linearly without
increasing or decreasing. The increasing return to scale means that the firm operating at lower scale
sizes, while decreasing return to scale means that the firm operating at higher scale sizes.
Inputs Outputs
Berth Storage Handling Ship Calls
Throughput (Tons)
Length(m) Area(m2) Equipment (Units)
Mean 2938.500 37.318 835584.636 2086.606 12102800.015
Std. Error of Mean 232.772 3.446 66339.004 125.965 1539146.311
Median 1862.500 23.500 539575.500 1818.500 6831638.500
Mode 320.000 9.000 20000.000 1450.000 241950.000
Std. Deviation 2674.343 39.590 762177.126 1447.233 17683444.807
Variance 7152111.641 1567.364 580913971516.997 2094483.080 312704220232032.000
Skewness 1.664 2.233 0.764 1.308 3.929
Kurtosis 0.211 0.211 0.211 0.211 0.211
Range 2.404 4.956 -0.726 2.290 20.790
Minimum 0.419 0.419 0.419 0.419 0.419
Maximum 10880.000 174.000 2480000.000 7450.000 129429309.000
Sum 320.000 2.000 20000.000 124.000 63644.000
Count 22 22 22 22 22
The multiple regressions are used to determine any relationship between the inputs and the
outputs. Table 4 shows the “R2” values as the proportion of variation in the dependent variable ship
calls and throughputs explained by the regression model are 0.801 and 0.907. The statistics and its
significant values are used to test the null hypothesis that the regression coefficient is zero that mean
there is a linear relationship between the dependent (ship calls and throughput) and independent (berth
length, equipment and area) variables.
Efficiency of Middle Eastern and East African Seaports: Application of
DEA Using Window Analysis 603
Outputs
Inputs
Ship Calls Throughput
Berth Length -0.015 -1082.928
Handling Equipment 19.015 290517.165
Storage Area 0.001 9.391
Constant 592.118 -3403512.341
R2 0.801 0.907
The software Efficiency Measurement System version 1.3 from Holger Scheel was applied to
solve the DEA with two models on the return to scale of ports production function, called CCR model
(constant return to scale) and BCC model (variable return to scale).
6. Results
We first applied DEA to analyse the efficiency score of the ports, we computed efficiency using two
models: DEA-CCR and DEA-BCC. DEA is carried on 22 ports shown in Table 1. Table 5 represents the
efficiency estimates, the scale efficiency and scale type of each port. The score report shows that 7 and
9 ports out 22 are efficient under DEA-CCR and DEA-BCC models, respectively. The results of two
models show that the number of efficient ports in BCC is more than CCR with average values of 0.786
and 0.875, respectively.
The output oriented model was applied in this paper to select the ports in terms of berth length,
storage area and handling equipment. Theatrically, the output of technical efficiency is given by
TEk=1/Uk for k term of DMU (Uk is an inefficient score under CCR using output-oriented). The ports
under study must increase their product on an average of 1.272 times for the same inputs. The scale
properties of ports production show 7 ports constant return to scale, 8 increasing return to scale, 7
decreasing return to scale. Note that 7 ports, Khor Fakkan, Dubai, Kuwait, Mukalla, Hodeidah, Yanbu,
and Djibouti are efficient under CCR and BCC.
We next applied DEA window to analyse the efficiency score of the ports, with two models
DEA-CCR and DEA-BCC. The window analysis is used to examine the efficiency over time for the
period 2000-2005 (6 years x 22 ports = 110 observations), T=6, p=3 and w=4. DEA is carried on 22
ports shown in Table 1. As such, the length of the window used here is defined as three (Charnes et al.
1985). the scale efficiency of each port. Four separate windows are represented as separate rows in
Tables 6 and 7. Tables 6 and 7 represent the efficiency estimates, the average of DEA efficiency scores
and its standard deviation in the columns denoted ‘Mean’ and ‘S.D’.
The identification of performance trends in row window and the stability is defined in column
of each year that allows controlling both of them through the separate windows. The efficiency score
estimated shows that 16 and 17 ports are stable (have low standard deviation) under CCR and BCC,
respectively, on the other hand, 6 and 5 ports are unstable (have high standard deviation) under CCR
and BCC, respectively. The efficiency score mean value shows better under BCC than CCR, although
all the ports still inefficient and reflect a fluctuation in efficiency score. There is an improvement in the
efficiency for Khor Fakkan, Kuwait, and Djibouti ports with CCR, and Bander Abbas, Khor Fakkan,
Dubai, Kuwait, Mukalla, Mombasa and Djibouti ports with BCC. The variation haphazard
(increasing/decreasing or decreasing/increasing) in performance impacted the main efficiency over the
time period. In general, all the ports are stable. Table 8 shows the scale efficiency of all the ports over
the entire time periods of study.
The comparison between cross-section data and panel data in Tables 5 and in Tables 6, 7 shows
a similarity in average efficiency score for most of these ports.
604 Ahmed Salem Al-Eraqi, Adli Mustafa, Ahamad Tajudin Khader and Carlos Pestana Barros
7. Discussion
In this paper DEA cross-section data and window analysis are used to determine the relative efficiency
of 22 cargo ports in the Middle East and Africans countries. The results of cross-section provide
information for the overall time period. The panel data provide large details of performance analysis
over a period of time. The fluctuation of the efficiency score with window analysis, due to the
comparison between the big ports which have high production and small ports which have low
production. This study shows that small ports are efficient while big ports are inefficient. The
indicators of production scale in this study as shown in Table 6 and 7 are the main factors of efficiency
and inefficiency.
The inefficiency of ports may also have resulted for reasons, such as 3rd Gulf War and to other
reasons related to the security of ship companies particularly in this region during 2003-2004. We
conclude that for increasing port efficiency, ships arrival should be encouraged to increase the scale of
production; on the other hand, the inefficient ports with declining efficiency reduce their scale of
operation to be efficient. The comparison of the two methods shows biases in efficiency over the time
for Dubai, Mukalla, Hodeidah and Yanbu under CCR and Hodeidah, Yanbu under BBC, respectively.
This result provided with window analysis discusses the recent changes of performance and
stability of the port over time.
Table 5: The relative efficiency of seaports using DEA-CCR and DEA- BCC models in 2001
Country Port DEA - CCR DEA - BCC Scale Efficiency Return to scale
Bander Abbas Iran 0.803 1.000 0.803 Decreasing
Khor Fakkan Sharjah 1.000 1.000 1.000 Constant
Khalid Sharjah 0.834 0.848 0.983 Increasing
Salalah Oman 0.918 0.934 0.983 Increasing
Mascut Oman 0.683 0.726 0.941 Decreasing
Dubai Emirates 1.000 1.000 1.000 Constant
Kuwait 1.000 1.000 1.000 Constant
Mukalla Yemen 1.000 1.000 1.000 Constant
Aden Yemen 0.862 0.953 0.904 Decreasing
Hodeidah 1.000 1.000 1.000 Constant
Dammam Saudi 0.515 0.725 0.711 Decreasing
Jubail Saudi 0.708 0.735 0.964 Increasing
Yanbu Saudi 1.000 1.000 1.000 Constant
Jeddah Saudi 0.526 0.840 0.626 Decreasing
Sudan 0.683 0.862 0.792 Decreasing
Mombassa Kenya 0.876 0.985 0.889 Decreasing
Dar es Salaam Tanzania 0.841 0.870 0.966 Increasing
Tanga Tanzania 0.331 1.000 0.331 Increasing
Mtwara Tanzania 0.261 0.331 0.789 Increasing
Assab Eritrea 0.454 0.460 0.987 Increasing
Asmara Eritrea 0.989 0.989 1.000 Increasing
Djibouti 1.000 1.000 1.000 Constant
Average 0.786 0.875 0.894
Efficiency of Middle Eastern and East African Seaports: Application of
DEA Using Window Analysis 605
Acknowledgment
The authors are grateful to the ports authorities for providing data and information.
Efficiency of Middle Eastern and East African Seaports: Application of
DEA Using Window Analysis 611
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