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Measuring Efficiency Ports II

Point Location Study

University studies that analyze the efficiency of the ports are scarce and Gonzalez
second Tujillo, 2008. It was based on a text of Spanish researchers at the University of
Las Palmas, among others, who prepared the text of this month on port efficiency. The
literature review in ports is also scarce and will have begun by Estache et al., 2002,
Cullinane, 2002 and Wang et al., 2005.

The economic study of the port began in the '60s and stood at aspects of the fee
structure, capabilities and investments (Goss, 1967 and Heggie, 1974), followed by
studies of the impact of ports in economic activity (Waters, 1977 and Chang, 1978).

The first economics textbooks port then appeared (Peston and Rees, 1971, Bennathan
and Waters, 1979, Jansson and Shneerson, 1982), studies have emerged on port
productivity and determinants (Suykens, 1982, De Monie, 1987, Dowd and Leschine ,
1989, Tongzon, 1993 and 1995, Talley, 1994, Sachish, 1996, Robinson and Everett,
1997, Fourgeaud, 2000) on investments (Shneerson, 1981) and planning (Bobrovitch,
1982, Shneerson, 1983, Goodman, 1984) , seeking to determine the optimal size of
infrastructure, using the theory of queues, and dynamic programming.

Other aspects that generated interest were the privatization of ports (Fernandez et al.,
1999, and Tujillo Nommbela, 2000), promoting competitiveness (Heaver, 1995) and the
criteria for selection of ports (Slack, 1985, Malchow and Kanafani, 2001). The
estimated costs, economies of scale and determinants of costs were also studied (Reker
et al., 1990, Martinez-Dudria, 1996 and 1998, Jara-Diaz et al., 1997 and 2005).

The first studies on port efficiency have emerged in the '90s, modestly. Recently, the
efficiency and productivity have been major themes of researchers port, since there have
been major changes with the expansion and deepening of ports, with improved
technology, organizational change and privatization and specialization of inputs and
terminals, with impacts efficiency and productivity.

According Tujillo and Gonzalez, 2008, studies on port efficiency can be classified into
three major groups: The first includes studies with one-dimensional or partial indicators
of productivity of the port system. The second group of studies includes those who have
only one vision of the engineering side, using simulations and the theory of queues. The
third group, the most recent estimate covers the technological frontier production using
multivariate approaches in the inputs and outputs and is in support of political and
economic decision port.

The literature on the subject appeared in 1982, Suykens, it believed that productivity
should be measured only in port, due to difficulties in comparison to the dissimilarity
between ports. Later Suykens indicators were used in the comparison of ports (Talley,
1994, Tongzon, 1995) and in promoting competitiveness. The measure of productivity
was identified as relevant to that port operators and port authorities could locate its port
and analyzing the effect of their actions and reforms implemented.

The disadvantage of one-dimensional view ports, as it only compares a variable input

with a variable output, it does not cover the special nature of multidimensional and
multivariate ports, which handle various types of cargo such as output and inputs have
several related hand labor, capital, land, etc..

This problem was only resolved through the analysis of TFP (total factor produtivity),
which is an index reflecting the overall contribution of all factors relevant input and all
outputs. The first application of this methodology was Sachish and Kim, 1986, found
that the growth of TFP of the port of Ashdod (Israel) due to technological factors and
economies of scale.

In 1998, Martinez-Budri, attributed the growth of TFP of Spanish stevedoring

companies to change technical, organizational and cost savings with increased
production. More recently, several authors decomposed the change in TFP in several
factors (Martin, 2002, Diaz, 2003 Estache et al., 2004).

In 1996, Stachish concluded that the main factors affecting the productivity of ports in
Israel were the levels of activity and capital investment. De Neufville and Tsunokawa,
1981, concluded that the productivity of ports increases with the size and that there are
significant economies of scale, which led to a recommendation to invest more in major
ports and be cautious in small ports.

In 90 years the application of new methodologies for measuring efficiency were

introduced in the ports, but there was a lot of discussion about which method best
defined the complex reality of the ports. Studies have focused on the relationship
between efficiency and reforms in the ports, and the efficiency of port ownership,
efficiency and size, efficiency and transhipment, efficiency and investment, efficiency
and hub ports "(Noteboom et al., 2000) and the efficiency and time (Cullinane et al.,

In 2004, Estache et al., Decompose the TFP into technical changes, changes of scale
and efficiency changes. In 2000, Van den Broeck has shown that the efficiency of ports
increases with the increasing competition and decentralization of port authorities, which
was confirmed by Estache et al. In 2002 and 2004. Several studies show that
benchmarking is the best way of regulating port (Tongzon, 2001, Estache et al., 2002.

Although it often confuse the concepts of efficiency and productivity, there are
analogous notions. Many times the change in productivity is due largely to changes in
efficiency, which can lead to confuse the two.

Productivity is a simple relationship or ratio between an output and an input (Output /

Input). The Total Factor Produtivity will therefore be the relationship or ratio between
the function of output and function of inputs in a multidimensional way. Since the
efficiency is related to the comparison between the values of output and input values
and the optimum located on the production frontier that maximizes the ratio output /
input ports of a sample.

The following graph of Gonzalez and Tujillo, 2008, clarifies the difference between
Productivity and Efficiency.

Productivity - Lines Pt and Pt +1 connecting ports with the same ratio of productivity
(outputs: y / inputs: x) at different scales of production y.

Efficiency - The lines f (x, t +1) and f (x, t) is the technology of production and
maximum productivity possible with certain technology, certain empirically an enlarged
sample ports at different dates. For example, comparing the values of (yx) of port A,
with the border line f (x, t) gives an indicator of relative efficiency, compared to best
practice sample ports.