Determinants of cargo and eco-efficiencies of global container shipping companies

Abstract

PurposeThis study aims to evaluate cargo and eco-efficiency of global container shipping companies (CSCs) and explore the determinants of the CSCs' efficiencies. While the former is derived from the CSCs' operational perspective, the latter highlights environmental issue related to carbon emission reduction.Design/methodology/approachIn the first stage, a two-stage double bootstrap approach of data envelopment analysis (DEA) is applied to derive bias-corrected cargo and eco-efficiency of the top ten global CSCs under the variable returns to scale assumption. In the second stage, ordinary least squares and truncated regression are applied to examine determinants of the CSCs' efficiencies.FindingsThe DEA results reveal that the cargo efficiency of the CSCs is higher than their eco-efficiency by about 2.6% under variable returns to scale in DEA. However, the bias-corrected results show that the difference is 2.9%. The overall average efficiencies suggest that the CSCs can improve their cargo (eco) efficiency by 6.9% (10.8%). In the second stage, the regression results show that the numbers of ship, return on assets and asset turnover ratio are significantly related to both cargo and eco-efficiencies, whereas the total fleet capacity positively affects cargo efficiency.Research limitations/implicationsThe results of this study can help the inefficient CSCs make strategic decisions to improve their performance. For example, their business experience and capacity may be contributing to their efficiencies. However, this study only focuses on the container market among the three main markets, namely, dry bulk, wet bulk and container.Originality/valueThis study highlights an environmental issue in the shipping industry. While CSCs are operating their cargo efficiently in general, they should also put green initiatives into their business operations for the long-term sustainability.

Examining the impact of the COVID-19 pandemic on container carrier performance

“…They considered two-stage business processes using NSBM, which could not be accomplished by the traditional DEA models such as BCC, CCR and SBM. Kuo et al ( 2020 ) examined the efficiency of the top-ten global container carriers on their cargo operations and environmental practices using DEA with VRS and regression analysis. Their bias-corrected results revealed that ten carriers could improve efficiencies on both cargo operations and environment practices.…”

“…Their bias-corrected results revealed that ten carriers could improve efficiencies on both cargo operations and environment practices. Similar to Kuo et al ( 2020 ), Hsieh et al ( 2021 ) analyzed the efficiency of global container carriers using NSBM and a directional distance function. Findings and implications were similar to those of Kuo et al ( 2020 ).…”

Evaluating Global Container Shipping Companies: A Novel Approach to Investigating Both Qualitative and Quantitative Criteria for Sustainable Development

“…In existing DEA-related articles, cargo efficiency and economic efficiency of specific CSCs have been investigated, including in studies such as [4,7,[17][18][19][20]. Eco-efficiency has been discussed in the most recent articles [2,16,21].…”

“…Their proposed model was applied for international shipping companies as their business units. Kuo et al [21] developed two separate DEA models to obtain the cargo and eco-efficiency scores of 10 global CSCs and explore the determinants of the CSCs' efficiencies.…”

“…Equation ( 20) is used to defuzzify the criterion weights. They are then normalized using Equation (21). The final ranking scores are aggregated using the multiplication operator in Equation (22).…”