The IUP Journal of Operations Management
The Efficiency of Seaports in India: An Empirical Analysis

Article Details
Pub. Date :Nov, 2018
Product Name : The IUP Journal of Bank Management
Product Type : Article
Product Code : IJIT21809
Author Name : T Rajasekar, Malabika Deo
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 26

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Abstract

In the present study, an attempt has been made to measure the operational efficiency of major, medium and minor ports in India during the period 1993-2016 by employing Data Envelopment Analysis (DEA) models. The study also tests whether size is a determining factor of port efficiency. Based on the empirical results, the operational efficiency of both the bigger ports like JNPT and Krishnapuram as well as of the smaller ports like Ennore, Beypore, Cuddalore and Gangavaram were observed to be the best among all three categories. Hence, the general notion that size contributes to the operational advantage gets negated as it is observed that efficiency does not depend on size. Further, the ports that were found to be scale inefficient need to improve their utilization of resources through modernization of port facilities. Further, the ports that were observed to be pure technically inefficient indicate that they are technologically lagging behind, and thus technological upgradation needs to be undertaken to make them efficient.


Description

India extensively depends on external trade because it is surrounded on three sides by ocean. According to a report, 90% of India's international trade is carried out through sea routes. According to Cullinane and Song (2002), sea route trade is the backbone of the country's trade and economy. Of the total trade, 77% is transacted through sea routes, hence sea route trade assumes unparalleled importance in the performance of the country's overall international trade. The sea route trade mostly depends on containerization due to safety of the goods. Alongside the significant place of sea route, trade in economy ports of the country assumes critical importance. A country's trade performance also gets evenly linked with performance of ports. To efficiently handle the traffic volume, the port sector of the country should get priority. At the same time, ports also need to be evaluated in terms of their efficiency in operation in comparison to other ports. Fundamental concept to improve the efficiency of the ports lies in utilizing sophisticated mechanism to handle the goods, which in turn improves the traffic of the port. The authority should also measure port efficiency with the help of sophisticated analytical model that will enable them to identify the area that needs improvement or bring necessary modernization to the system, so that in the face of increased competition, proactive steps can be taken to enhance efficiency, thereby countering the competition with strength. Against this backdrop, the present study uses output-oriented DEA models for measuring the relative efficiency of ports in India.


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