Impact of Port Investment on Efficiency and Capacity to Attract Traffic in Spain: Bilbao versus Valencia

Abstract

The growth in intermodal transport has led to an increase in competition between ports. Other factors, such as the globalisation of the economy, European Union interest in integrating the port system into the Transeuropean Transport Network and the reform of the Spanish port system, have encouraged the Spanish Port Authorities to develop competitive strategies to extend their hinterlands. These strategies have often focused on improving port infrastructure in order to improve the efficiency of their services. In this paper, we analyse the extent to which investment expenditure has led to improvements in efficiency and how far this improved efficiency has increased the port's ability to attract traffic. To do so, we use DEA and study inter-port traffic redistribution from the land side. The analysis focused on the Ports of Bilbao and Valencia not only because they are very important in the Spanish port system but also because they both stand out for their investment expenditure, which has led to quite different results. We conclude by discussing the consequences of investment and port location for efficiency and the capacity to attract traffic, respectively. Maritime Economics & Logistics (2007) 9, 254–267. doi:10.1057/palgrave.mel.9100183

Evaluating Iberian seaport competitiveness using an alternative DEA approach

“…Tongzon [39] have analysed 16 world seaports and found an indistinct relationship between size and efficiency level. Garcia-Alonso e Martin-Bofarull [23] concludes that seaport authorities should not base their success in competing with other seaports for maritime traffic on the volume of their expenditure on infrastructure. Although the resulting gains in efficiency are essential, these do not necessarily derive from the size of the investment because they do not always depend on the increase in the size of the seaport's installations.…”

“…Most recently, a growing body of literature deploying a variety of approaches has emerged dealing with efficiency issues in seaports [4,9,12,13,17,23,32,35,36]. The basic premise underlying the concept of efficiency is that no output can be produced without resources (inputs) and that these resources are scarce.…”

“…These functions, which are estimated to determine efficiency, are also known as stochastic frontier approach (SFA). During the last few decades, however, an alternative methodology to the SFA knows as the DEA has been developed with its application growing rapidly in popularity in recent times [12,17,23,40]. Both the DEA and the SFA approaches have been applied to study seaport productive efficiency due to the sheer importance of improving their productivity levels.…”

“…In a previous study, Dias et al [17] applied DEA to Iberian seaports but focused on container terminals. There are also some other studies [4,5,7,9,17,23,32] dealing with Portuguese and Spanish seaports efficiency issues but separately or in conjunction with other European seaports. Furthermore, none of these studies identify the cause of efficiency or inefficiency of seaports that can help inefficient seaports to improve their efficiency.…”

Multi-Criteria Evaluation of Port Competitiveness in West Africa Using Analytic Hierarchy Process (AHP)

“…Table 2 shows various methods used by authors in measuring container port competitiveness. [20] Identify factors important to container port competitiveness in China [18] Identify important factors in transshipment port selection [27] Identify factors important to shipping lines for choice of port between Montreal and New York [23] Identify important port selection factors for shippers in Nigeria [28] Identifying main factors that influence hub port location choice in West Africa Data Envelopment Analysis (DEA) [29] Identify factors affecting efficiency of Portuguese and Greek ports [30] Identify factors affecting efficiency of Korean ports [31] Identify factors affecting efficiency of container ports [32] Determine efficiency of ports and impact on competitiveness of short sea shipping versus road transport in Europe [33] Determine impact of improving port infrastructure on cargo volumes in two Spanish ports…”