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The impact of operational and strategic management on liner shipping efficiency: a two-stage DEA approach

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  • Hee-Seok Bang
  • Hyo-Won Kang
  • Jeffrey Martin
  • Su-Han Woo

Abstract

This paper aims to measure the relative efficiency of liner shipping companies in terms of operational and financial performance and further investigates the impact of strategic and operational management on efficiency performance. A two-stage Data Envelopment Analysis (DEA) approach is employed combining DEA and Tobit regression, which has been extensively used in various research areas. 14 liner shipping companies from the top 20 container lines in terms of fleet capacity were included in this analysis. The results suggest that the firm size (in terms of TEU capacity), ship size, the ratio of chartered vessels, use of new vessels, and the formation of alliances all make a positive contribution to the financial performance of liner shipping companies. Ship age and ship type did not show a significant contribution to the financial performance and, for the operational performance, any of these determinant factors were not significant. This analysis is able to provide container shipping companies with information on the managerial and strategic implications of how managerial options influence operational and financial performance. In addition, maritime researchers will benefit from this study, measuring the efficiency of container shipping companies and the factors that influence efficiency, as this study is the first to investigate and model factors of relative efficiency of container shipping companies to the authors’ knowledge.

Suggested Citation

  • Hee-Seok Bang & Hyo-Won Kang & Jeffrey Martin & Su-Han Woo, 2012. "The impact of operational and strategic management on liner shipping efficiency: a two-stage DEA approach," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(7), pages 653-672, December.
    • Handle: RePEc:taf:marpmg:v:39:y:2012:i:7:p:653-672
    DOI: 10.1080/03088839.2012.740165
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    Cited by:

    1. Shih-Liang Chao & Chun-Wei Lai, 2019. "Comparing the efficiency of alliance members and independent liner carriers: a metafrontier analysis," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(2), pages 157-172, June.
    2. Hashem Omrani & Mehdi Keshavarz, 2016. "A performance evaluation model for supply chain of shipping company in Iran: an application of the relational network DEA," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(1), pages 121-135, January.
    3. Lam, Jasmine Siu Lee, 2015. "Designing a sustainable maritime supply chain: A hybrid QFD–ANP approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 78(C), pages 70-81.
    4. Tran, Nguyen Khoi & Haasis, Hans-Dietrich, 2015. "An empirical study of fleet expansion and growth of ship size in container liner shipping," International Journal of Production Economics, Elsevier, vol. 159(C), pages 241-253.
    5. Grace W.Y. Wang & Su-Han Woo & Joan Mileski, 2014. "The relative efficiency and financial risk assessment of shipping companies," Maritime Policy & Management, Taylor & Francis Journals, vol. 41(7), pages 651-666, December.
    6. Hong-Oanh Nguyen & Hong-Van Nguyen & Young-Tae Chang & Anthony T. H. Chin & Jose Tongzon, 2016. "Measuring port efficiency using bootstrapped DEA: the case of Vietnamese ports," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(5), pages 644-659, July.
    7. Hyo-Won Kang & Grace W Y Wang & Hee-Seok Bang & Su-Han Woo, 2016. "Economic performance and corporate financial management of shipping firms," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 18(3), pages 317-330, September.
    8. Sugrue, Dennis & Adriaens, Peter, 2021. "A data fusion approach to predict shipping efficiency for bulk carriers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    9. Peng, Wenhao & Bai, Xiwen, 2022. "Prospects for improving shipping companies’ profit margins by quantifying operational strategies and market focus approach through AIS data," Transport Policy, Elsevier, vol. 128(C), pages 138-152.
    10. H. Pierre Hsieh & Kuo‐Cheng Kuo & Minh‐Hieu Le & Wen‐Min Lu, 2021. "Exploring the cargo and eco‐efficiencies of international container shipping companies: A network‐based ranking approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 45-60, January.
    11. Jiawei Ge & Mo Zhu & Mei Sha & Theo Notteboom & Wenming Shi & Xuefeng Wang, 2021. "Towards 25,000 TEU vessels? A comparative economic analysis of ultra-large containership sizes under different market and operational conditions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(4), pages 587-614, December.
    12. Su-Han Woo & Hee-Seok Bang & Sally Martin & Kevin X. Li, 2013. "Evolution of research themes in Maritime Policy & Management—1973--2012," Maritime Policy & Management, Taylor & Francis Journals, vol. 40(3), pages 200-225, May.
    13. Yu, Ming-Miin & Chen, Li-Hsueh, 2016. "Centralized resource allocation with emission resistance in a two-stage production system: Evidence from a Taiwan’s container shipping company," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 650-671.
    14. Yi-Hui Liao & Hsuan-Shih Lee, 2023. "Using a Directional Distance Function to Measure the Environmental Efficiency of International Liner Shipping Companies and Assess Regulatory Impact," Sustainability, MDPI, vol. 15(4), pages 1-13, February.
    15. Michael J. Maloni & David M. Gligor & Ioannis N. Lagoudis, 2016. "Linking ocean container carrier capabilities to shipper–carrier relationships: a case study," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(8), pages 959-975, November.
    16. Serebrisky, Tomás & Sarriera, Javier Morales & Suárez-Alemán, Ancor & Araya, Gonzalo & Briceño-Garmendía, Cecilia & Schwartz, Jordan, 2016. "Exploring the drivers of port efficiency in Latin America and the Caribbean," Transport Policy, Elsevier, vol. 45(C), pages 31-45.
    17. Song, Dong-Wook & Seo, Young-Joon & Kwak, Dong-Wook, 2019. "Learning from Hanjin Shipping’s failure: A holistic interpretation on its causes and reasons," Transport Policy, Elsevier, vol. 82(C), pages 77-87.
    18. Gong, Xiaoxing & Wu, Xiaofan & Luo, Meifeng, 2019. "Company performance and environmental efficiency: A case study for shipping enterprises," Transport Policy, Elsevier, vol. 82(C), pages 96-106.
    19. Chao, Shih-Liang & Yu, Ming-Miin & Hsieh, Wei-Fan, 2018. "Evaluating the efficiency of major container shipping companies: A framework of dynamic network DEA with shared inputs," Transportation Research Part A: Policy and Practice, Elsevier, vol. 117(C), pages 44-57.
    20. Dong-Joon Kang & Su-Han Woo, 2017. "Liner shipping networks, port characteristics and the impact on port performance," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 19(2), pages 274-295, June.
    21. Joohwan Kim & Hwayoung Kim, 2021. "Evaluation of the Efficiency of Maritime Transport Using a Network Slacks-Based Measure (SBM) Approach: A Case Study on the Korean Coastal Ferry Market," Sustainability, MDPI, vol. 13(11), pages 1-17, May.

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