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DEA Window Analysis for Measuring Port Performances Efficiency of Four Islands Countries Located in West Indian Ocean Countries

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DEA Window Analysis for Measuring Port Performances Efficiency of Four Islands Countries Located in West Indian Ocean Countries American Journal of Industrial and Business Management, 2019, 9, 2098-2111 https://www.scirp.org/journal/ajibm ISSN Online: 2164-5175 ISSN Print: 2164-5167 DEA Window Analysis for Measuring Port Performances Efficiency of Four Islands Countries Located in West Indian Ocean Countries Onally Dewarlo College of Transport & Communications, Shanghai Maritime University, Shanghai, China How to cite this paper: Dewarlo, O. (2019) Abstract DEA Window Analysis for Measuring Port Performances Efficiency of Four Islands DEA window analysis has been a great tool used in improving the economic Countries Located in West Indian Ocean impacts of ports through its efficiency analysis. This has been employed to Countries. American Journal of Industrial ports found in West Africa, Europe, Asia ports; nonetheless, this has not been and Business Management, 9, 2098-2111. https://doi.org/10.4236/ajibm.2019.912139 applied to Indian Ocean Island ports. The purpose of this paper is to investi- gate the port efficiencies of four island port countries found in the West In- Received: October 23, 2019 dian Ocean (port Reunion, the port of Colombo, Port Louis and the port of Accepted: December 3, 2019 Published: December 6, 2019 Toamasina). DEA window analysis is used to determine port efficiency and to observe the possibility of changes in port efficiency over time. Despite the Copyright © 2019 by author(s) and measures were put in place to improve the efficiency of the port, corruption, Scientific Research Publishing Inc. unskilled labour and others are some inefficiencies that hinder the perfor- This work is licensed under the Creative Commons Attribution International mance of the port. Implications and future research directions are also in- License (CC BY 4.0). cluded in this study. http://creativecommons.org/licenses/by/4.0/ Open Access Keywords DEA Analysis, Port Efficiency, Western Indian Ocean, Window Analysis, Indian Ocean Island Countries, Efficiency, Performance 1. Introduction 1.1. Background The Indian Ocean is fast becoming the new centre of economic gravity, as it ties together the economic fortunes of emerging Asia, the US, and Europe. Maritime rivalries in the Indian Ocean are an early indicator of the return of great-power economics of the country that profits this great opportunity. The place of the In- DOI: 10.4236/ajibm.2019.912139 Dec. 6, 2019 2098 American Journal of Industrial and Business Management O. Dewarlo dian Ocean in the world economy becomes predominant with the rise of South Asia and India. Its strategic sensitivity appears every day more. Bordered by the world’s largest hydrocarbon reserve, the southern Indian Ocean area serves as a vehicle for marine oil transport. 50% of this transport is transported each year from the Persian Gulf to Cape Town via the Mozambique canal. The container roads also cross it to Asia that is Malacca—Suez and Malacca—Le Cap, vital for world trade. There are several Islands in the Indian Ocean who could benefit from maritime transport, like Sri Lanka, Mauritius, Reunion Island and Mada- gascar. Found in the south-west of the Indian Ocean, Reunion and Mauritius form the Mascarene archipelago. Both are 200 km apart. If Reunion is a French overseas department, Mauritius, a former British possession, is independent since 1968, they have a good port located in the west part of Indian Ocean. While the island of Madagascar is also on the edge of the Indian Ocean, it is surrounded by 5,000 km of coast, the southeast coast of Africa. It is estimated that most of its international trade (+90%) is made via the port of Toamasina and also via the main regional and worldwide shipping routes. Moreover, Sri Lanka, whose geographical positioning is very strategic, is located at the south- ern tip of the only continental mass extending to the Indian Ocean between Arab and Malay peninsulas. Their strategic position naturally gives Sri Lanka an additional competitive advantage to develop as an Asian maritime centre. The development of the port of Colombo as the central port hub of the region in the 19th and 20th centuries was also greatly facilitated by this competitive advantage of strategic positioning. 1.2. Research Objectives Maritime transport is a global economy that accounts for 90% of the total vo- lume of world trade. The Merchant Navy plays an essential role in the realization of commercial transactions between the different continents of the world, whether it is raw materials, food products or manufactured goods. Maritime transport is one of the cheapest means of transport, all types, both in terms of cost of materials and capacity. It has many features that do not require continuous modifications, except at the beginning and end for the port’s roads and docks. Due to the importance of Shipping and its additional benefits, it is considered to be the backbone of the country’s economy and the basis for sustainable de- velopment. Thus, without the different means of transport, in particular, mari- time transport, investment opportunities and business conditions will be nega- tively affected by some other countries. This paper, therefore, aims to examine the performance efficiency of following strategic seaports in West of the Indian Ocean, the port of Reunion, the port of Colombo, the Port Louis Port and the port of Toamasina. These islands in the west of the Indian Ocean are strategic in the sense that they are counted among the key to transport maritime in the Indian Ocean, added to the fact that they compete for the same markets. So after the examination of the performance effi- DOI: 10.4236/ajibm.2019.912139 2099 American Journal of Industrial and Business Management O. Dewarlo ciency for those four Island port, we need to answer this following key question: 1) Which Port is the most efficient among them four? 2) What is the main reason for inefficiency of the other port? 3) What are the solutions we should suggest about those inefficiency prob- lems? The remainder of this study is organized in the following way. Section 1 presents the introduction, the research question and the theoretical research ba- sis on the topic of ports performance efficiency and DEA. Section 2 introduces the methodology adopted; then Section 3 presents the data source and discusses the empirical results of the four studied strategic island ports in the west of the Indian Ocean. The paper concludes the study in Section 4. 1.3. Literature Review The term “performance” is generally understood as an industrial word to assess the success of an organization in achieving a certain level of its strategic objec- tives [1]. Logistic performance can be defined as the degree of achievement of a company’s objectives [2]. Port performance criteria are often decisive for the competitiveness of ports, or factors influencing the competitiveness of ports [3]. Regularly measuring port productivity is crucial to finding opportunities for de- velopment and optimization [4]. According to [5] [6], their studies revealed that many ports were investing bil- lions of dollars in port infrastructure to improve their existing facilities in order to cope with an increase in the volume of trade followed by an increase in the size of service needs. It also mentions that many ports need to enlarge their ports to meet the demand of companies and that it is challenging to develop a balance between economic, environmental and social problems to ensure growth lasting. The essence of the essential developing ports is considered to be the primary ob- jective of all countries for which they must provide many benefits [7]. Maritime transport and the port industry now appear as indispensable vectors of development in a globalized economy, ports have played an essential eco- nomic role in the import and export processes to countries, in particular, heavy goods transport. Thus, all countries attach importance to seaports because they are the main gateway to income. Several studies have recommended using DEA models to assess the perfor- mance and efficiency of the sector. Where to find [8], is analyzed one unit at a time. A unit is considered to work to determine the weight of their inputs and outputs. The same thing should be done for all the other units, determining the weights according to the particular optics of each. Then, if the unit is efficient, you will get the maximum rate when evaluating several other units. Some units may be considered adequate only by their criteria; others, or even have the free- dom to choose weights for their inputs and outputs, can be efficient. In terms of productivity [9], study the importance of operational efficiency for hotel profita- bility, considered a significant target for investors, using Data Envelopment Analysis (DEA) and the return on assets. Efficiency and for the ROA, is in the DOI: 10.4236/ajibm.2019.912139 2100 American Journal of Industrial and Business Management O. Dewarlo big hotels. Highly indebted hotels have average efficiency but lower profitability than less-indebted hotels. Also, some studies have shown that the model (DEA) can be used to evaluate the services sector of public and private hospitals [10]. In this paper, the emphasis was placed on the feasibility of using the DEA model by evaluating four major ports belonging to four Indian Ocean island countries and then giving a clear view of the importance of developing ineffi- cient ports, while [11] used DEA models to measure the efficiency of African ports. In addition to [12], evaluate ports by verifying whether or not they re- spond to requests. In contrast to the port performance indicators developed by UNCTAD [13], the advantage of DEA is that multiple inputs and outputs can be added to the model, and so it can provide an overall assessment of port perfor- mance [14].
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