Category: Business and Organizational Research
Benchmarking Performance Indicators
of Indian Rail Freight by DEA Approach
Neeraj Bhanot
Dr. B. R. Ambedkar National Institute of Technology Jalandhar, India
Harwinder Singh
Guru Nanak Dev Engineering College, India
INTRODUCTION
To accomplish the organization’s logistics/dis-
tribution activities, measurement systems have
been designed to capture information regarding
five types of performance. These five categories
are: asset management, cost, customer service,
productivity and logistics quality (Li, 2005).
Li (2005) discussed several evaluation meth-
ods for logistics performance. Qualitative and
quantitative data can be dealt by AHP method but
the weight of different factors is objective. The
result is influenced by the subjectivity greatly.
Mathematic statistics method mainly conducts
the quantitative data, and the evaluation process
is objective. However strong qualitative analysis
ability has been shown by Fuzzy comprehensive
evaluation and Rough sets method. The above
methods are not systematized as a whole. The
objects, contents and methods are too much com-
plicated to be integrated. But DEA (Data Envelop-
ment Analysis) especially suitable for multi-input
and multi-output complicated systems take the
weights of input and output of DMU (Decision
Making Units) for variables, evaluates in terms
of DMU. In a word, DEA is more suitable evalu-
ation method for the logistics activities as it has
very strong objectivity.
Data Envelopment Analysis (DEA)
DEA measurement can be defined as the ratio
of total weighted output to total weighted input.
It is a linear programming-based technique that
DOI: 10.4018/978-1-5225-2255-3.ch051
Copyright © 2018, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
587
B
converts multiple input and output measures into
a single comprehensive measure of productivity
efficiency (Epstein, & Henderson, 1989). DEA
provides a measure by which one firm or depart-
ment can compare its performance, in relative
terms, with other homogeneous firms or depart-
ments. In measuring the relative efficiencies of
organizations with DEA each organization can
utilize different weights for the set of perfor-
mance measures. Weights are selected that will
maximize the composite efficiency score for each
functional unit. Taking into account differences in
goals, responsibilities, and type of procurement,
this variable weighting allows for the evaluation
of performance. The range of possible weights
is controlled by requiring all weights to be posi-
tive, and specifying that if another unit used the
same weight, their total efficiency score could not
exceed the value of one. The technique also gives
information as to the specific effect each input or
output has on overall efficiency as yet, which has
demonstrated its use as a potential evaluation tool
for logistics performance. In summation, DEA can
be used to reduce some of the existing problems
with performance evaluation system (Charnes,
Cooper, & Rhodes, 1978).
An examination of the literature reveals the
application of DEA for performance bench-
marking in a variety of settings such as telecom-
munications (Lupi, Manenti, Scialà, & Varin,
2011), educational institutes (Portela, Camanho,
& Borges, 2011), productive efficiency (Farrell,
1957; Chandraprakaikul, & Suebpongsakorn,
2012; Holden, Xu, Greening, Piecyk, & Dadhich,
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach
2016), Irrigation sector (Phadnis, & Kulshrestha,
2012), safety performance (Beriha, Patnaik, &
Mahapatra, 2011), etc.
Indian Railway Container Scenario
By taking over network of seven Inland Container
Depots (ICDs) of Indian Railways (IR) located at
Delhi, Ludhiana, Bangalore, Coimbatore, Guwa-
hati, Guntur and Anaparti, Container Corporation
of India (CONCOR) was incorporated in March
1988 as a Public Sector Enterprise under the
Ministry of Railways. The company was formed
with objective to have a separate organization for
promoting and managing the growth of container-
ization in India as well as developing multimodal
(surface, rail, water and air) transport logistics and
infrastructure to support India’s growing inland as
well as international trade. Under the supervision
of Managing Director, the day-to-day affairs of
the business of CONCOR are managed by vari-
ous divisional heads (CARE, 2009). Although, IR
is a public sector monopoly, there is a growing
demand on it to realize the full scope of its assets
through proper use of systems and technology and
also to address the lack of its customer orienta-
tion. Therefore, there is a strong need to devise a
performance benchmarking system of its supply
chain operations (George, & Rangaraj, 2008). To
introduce competition in the container operations
segment, the Ministry of Railways allowed the
entry of private and public sector operators to
obtain licenses for running container trains on the
Indian Railways (IR) network in January 2006.
Until then, the Container Corporation of India, a
subsidiary of IR, was the monopoly operator of
container trains in India.
This book chapter is an extension of previous
study conducted on evaluating the performance
of CONCOR over a period of time using super-
efficiency analysis by employing CCR and BCC
models of DEA considering different parameters
for additional years to outline the key issues for
needful improvement by validating the results
of CCR and BCC models. The subsequent sec-
tions narrate thorough study of background of
588
performance evaluation perspective of logistics
operations within and outside country. Further,
DEA models, which are used in this study and
the application of these models for benchmark-
ing of Indian Railway Container Business within
CONCOR, have been explained. The last section
presents appropriate discussion on the results
obtained and conclusions of the study.
BACKGROUND
Freight Container Business continued to be mo-
nopoly in the hands of government owned Con-
tainer Corporation of India. In this section, history
of performance evaluation has been discussed
within and outside country in competitive scenario
over the years in order to cite the various cases of
performance oriented studies related to logistics.
Background Within Country
Napa (2006) discussed strategic moves and lo-
gistic operations, CONCOR took to establish it
and face the challenges posed by the entry of new
players. The task ahead in the company had been
discussed in addition to questions, which can be
taken as possible new problems for work. This
framework further provides scope for readers to
analyse various strengths and weaknesses of the
CONCOR in the light of the future competition.
George, & Rangaraj (2008) analysed the per-
formance benchmarking study of the zones of
Indian Railways (IR) to develop an alternate ap-
proach for measurement of aggregate operational
performance. The efficiency trends within the set
of inputs and outputs considered with efficiency
scores ranging between 58.26% to 100% by CCR
and 58.26% to 254.92% by RCCR analysis identi-
fied the best performing railway zones over the
years. The conclusion showed some weaknesses
of the conventional DEA due to cross-efficiencies
along with self-efficiencies and operating ratios.
Gangwar, & Raghuram (2010) examined the
current policy environment from the point of view
of business viability for 15 new Container Train

Operators discussing the various problems and
prospects of Container Train Operators in India.
It further brought out issues related to licensing,
pricing, terminals, maintenance, and service levels
found good response to the policy as entrants ob-
tained licenses to run container trains. However,
due to lack of clarity or inconsistency in matters
pertaining to haulage charges, maintenance of
wagons, transit guarantees from Indian Railways
(IR) and terminal access charges, operators
started feeling susceptical about the viability of
the business.
Ghosh, & Bandyopadhyay (2014) investigated
the efficiency of operating no-frill airlines (LCCs)
in eastern India by collecting publicly available
data of various parameters related to the technical
and financial health of these airlines. Technical
efficiency of each no-frill airline in comparison
with other no-frill airlines was studied by employ-
ing Data Envelopment Analysis on the input and
output variables. Further, Super Efficiency Model
was applied on the most efficient airlines. The
study thus helped in understanding the technical
efficiency and performance of operating no-frill
airlines in eastern India.
Performance Evaluation Study
of Logistics Operations Within
and Outside Country
Hilmola (2007) used DEA methodology to discuss
about the efficiency and productivity of railway
freight transportation sector in Europe. The analy-
sis revealed that former Eastern Bloc and West
European countries were showing the highest
efficiency levels in the 1980s and experienced an
efficiency collapse in the 1990s. Study on partial
productivity analysis proposed that productivity
of locomotives and railway tracks being primary
target for productivity improvement in the highly
efficient countries showed approximately 80%
increase in transit traffic via rail in all the Baltic
states.
Kunadhamraks, & Hanaoka (2008) evaluated
the logistics performance of intermodal freight
transportation using Fuzzy set theory to deal
Category: Business and Organizational Research
with attitudes and perceptions within the decision
process. Fuzzy-MCA was used to assess logistics B
operators’ perception of the performance via
proper assignment of numerical scores. Sensitivity
analyses of significant variables were performed to
examine the impact on changed costs and services
levels and found that it can entail use of improved
corresponding parameters to develop an efficient
logistics system in Thailand.
Koster, Balk, & Nus (2009) used data envel-
opment analysis (DEA) on primary data of large
container terminals, APMT (39 terminals) and
European terminals of PSA (seven terminals)
to discuss the reasons behind diverging results.
Quingdao-APMT, Raysut/Salah-APMT, and
Singapore-PSA-Brani were reported as the top
three efficient terminals with 100% efficiency un-
der CRS and VRS are all in Asia. Houston-APMT
would be number four with 38% efficiency. The
results differed strongly from those available in
the literature and the reason for different terminal
types and scales are mixed with the ports.
Mäkitalo, & Hilmola (2010) adopted meth-
odology to foresee the future development of
deregulated industries especially in the transpor-
tation sector. On the basis of a qualitative expert
profiling analysis using Delphi questionnaire
directed at 52 Finnish experts, as three different
argument types existed in Finnish railway trans-
port policy. Descriptions for each group based
on material collected by the Delphi technique
and concluded that the policy definitions have
followed the views of the moderate group and the
realization of the deregulation process has been
slow. The research was limited to the Finnish
railway freight transport market.
Hilmola (2011) developed efficiency bench-
marking measurement models for public transpor-
tation systems to decrease environmental emis-
sions in the future (CO2), worldwide decreasing
reserves of oil, and growing population in larger
cities in line with the global agreements. The
author used four different DEA based efficiency
benchmarking models to evaluate public trans-
portation efficiency in larger cities and found that
medium sized, old and Central European cities
589
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach
show frontier performance in all four models
whereas Mega-cities fail to reach frontier and/or
good performance.
Lee, Yeo, & Thai (2014) applied a slacks-
based data envelopment analysis (SBM-DEA)
model to assess the environmental efficiency
of port cities by considering labor population in
respective port cities as input variable, and gross
regional domestic product (GRDP) and container
throughput as output variables. The study also
considered various undesirable output variables
such as, nitrogen oxide (NOx), sulfur oxide (SO2),
and carbon dioxide (CO2) emissions. The results of
the study indicated Singapore, Busan, Rotterdam,
Kaohsiung, Antwerp, and New York as the most
environmentally efficient port cities with Tianjin
as the least environmentally efficient.
Shao, & Sun (2016) categorised the produc-
tion process of air routes into two stages viz.,
allocation and transport, and then proposed two
network data envelopment analysis (DEA) models
to analyse the efficiency of the system, allocation,
passenger transport, and freight transport of 477
air routes. The results of the study highlighted
the significant impact of different constraints on
intermediate measure in the network DEA models
affecting the air routes’ efficiency significantly.
In addition to this, most of the air routes depicted
high allocation and passenger transport efficiency
with low freight transport efficiency.
MAIN FOCUS
Data Envelopment
Analysis Approach
Linear programming (LP) multi-factor productiv-
ity analysis model Data Envelopment Analysis
approach (DEA) can be used to measure relative
efficiency of homogenous set of DMUs. It cal-
culates a maximal performance measure for each
DMU relative to all other DMUs with an objective
that each DMU lie on or below the external fron-
tier. Without requiring any specific assumptions
about the functional form, it optimizes on each
590
individual observations with the purpose of cal-
culating a discrete piecewise frontier determined
by the set of Pareto-efficient DMUs. Each DMU
not on the frontier is scaled down against a convex
combination of the DMUs on the frontier facet
closest to it.
The usual measure of efficiency, i.e.:
output
efficiency =
input
is often inadequate related to different resources,
activities and environmental factors due to the
existence of multiple inputs and outputs. DEA
methodology is developed to solve this problem.
There are two basic DEA models—CCR model,
developed by Charnes, Cooper and Rhodes in 1978
and BCC model, developed by Banker, Charnes,
and Cooper in 1984. CCR model generalizes the
single output/input ratio measure of efficiency
for a single DMU in terms of fractional linear
programming (FLP) formulation transforming the
multiple output/input characteristics of each DMU
to that of a single “virtual” output and “virtual”
input. The model defines the relative efficiency for
any DMU as a weighted sum of outputs divided
by a weighted sum of inputs where all efficiency
scores are restricted to lay between zero and one.
An efficiency score less than one means that a
linear combination of other units from the sample
could produce the same vector of outputs using
a smaller vector of inputs. The score reflects the
radial distance from the estimated production
frontier to the DMU under consideration. In order
to calculate efficiency scores, FLP is converted
into LP by normalizing either the numerator or
the denominator of the fractional programming
objective function. In case of input-minimization
DEA program, the weighted sum of outputs is
constrained to be unity to minimize weighted sum
of inputs while in output – maximization DEA
program, the weighted sum of inputs is constrained
to be unity to maximize weighted sum of outputs.
CCR model is based on constant returns to scale
assumption. Under this assumption, if the input
 Category: Business and Organizational Research

levels of a feasible input-output correspondence

are scaled up or down, then another feasible input-
s m B
output correspondence is obtained in which the
Subjected to ∑ µrk yrj − ∑ vik x ij ≤ 0
r =1 i =1
output levels are scaled by the same factor as the ∀j = 1..........n
input levels (Charnes et al., 1978).
µrk ≥ j ∀r = 1..........s
CCR Model
vik ≥ ε ∀i = 1.........m
This model generalizes the usual input/output
ratio measure of efficiency for a given firm in
terms of a fractional linear program formulation. Since the number of DMUs is generally larger
Mathematically, the relative efficiency of the kth than the total number of inputs and outputs, solving
DMU is given by: the dual of the model can reduce the computational
burden. Mathematically, the dual formulation of
the above model is:
∑ u y
s
r =1 rk
Max hk = rk
(1)
∑ vx
m
s m
i =1 ik ik Min z k = θk − ε∑ Srk+ − ε∑ Sik− (3)
r =1 i =1
Subjected to:
Subjected to
∑ u y
s
r =1 rk rj
≤ 1 ∀j = 1...k ...n n

∑ vx ∑λ
m
i =1 ik ij jk rj
y − Srk+ = yrk ∀r = 1..........s
j =1

urk n
≥ ε ∀r = 1......s
∑ i=1 uik x ik
m ∑λ jk
x ij + Sik− = θk x ik ∀i = 1.........m
j =1

vik λjk ≥ 0 ∀j = 1........n

≥ ε ∀i = 1......m
∑
m
i =1 ik
v x ik
θk free
where: yrk = the amount of the rth output produced
by the kth DMU; xik = the amount of the ith input
used by the kth DMU; urk = the weight given to Srk+ , Srk− ≥ 0 ; r = 1.........s, i = 1.........m
the rth output of the kth DMU; vik = the weight
given to the ith input of the kth DMU; n = no. of where: Srk+ = Slacks in the ith input of the kth DMU;
DMUs; s = no. of outputs; m = no. of inputs; and
Sik− = slacks in the rth output of the kth DMU;
ε = a non-Archimedean (infinitesimal) constant.
λjk ' s = non-negative dual variables; θk (scalar)
The above objective function is reformulated
in LP problem as follows: is the (proportional) reduction applied to all inputs
of DMUk to impose efficiency. If for DMU k,
s
θk* = 1 and all slacks are zero, it is Pareto efficient.
Max wk = ∑ µrk yrk (2)
r =1 The non-zero slacks and (or) θk* ≤ 1 identify the
m sources and amount of any inefficiency that may
∑v ik
x xk = 1 exist in the DMU under reference.
i =1

591
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach

Efficiency scores are constructed by measuring
how far a utility is from the frontier. A test DMU
is considered inefficient if a composite DMU
(defined as linear combination of units in the set)
can be identified which utilizes less input than the
test DMU while maintaining the same or greater
output levels (Phadnis, & Kulshrestha, 2012).
BCC Model
The convexity constraint is the primary difference
between BCC model and CCR model. In the BCC
model λjk are restricted to summing to one
(i.e. ∑ j =1 λjk = 1 ). The model is converted into
n
A number of uses have been proposed for
super-efficiency models (Lovell, & Rouse, 2003).
These include:
1. Ranking of efficient DMUs;
2. Classification of DMUs into extreme-
efficient and non-extreme efficient groups;
3. Sensitivity of efficiency classifications;
4. Two-person ratio efficiency games;
5. Identifying outliers in the data;
6. Overcoming truncation problems in second-
stage regressions intended to explain varia-
tion in efficiency;
7. Calculating and decomposing a Malmquist

productivity index.
Non-Increasing Returns to Scale (NIRS) model,
∑
n
if we impose j =1
λjk ≤ 1 instead of Super-efficiency measures are constructed by
avoiding that the evaluated firm can help span the
∑
n
λjk = 1 . Similarly if we impose
j =1 technology (Bogetoft, & Otto, 2011). Let
∑ ∑
n n
j =1
λjk ≥ 1 instead of j =1
λjk = 1 , then the T ∗ (γ | −k ) be a DEA approximation of the
model is known as Non-Decreasing Returns to technology using the γ assumptions and based
Scale (NDRS) model. on all observations but that of firm k (Box 1).
Now the efficiency of (xk, yk) relative to
DEA Super-Efficiency Model T ∗ (γ | −k ) is called super-efficiency.

The discriminatory power of super-efficiency E SUPk = E ((x k , y k );T ∗ (γ | −k )) ,

model provides insights that cannot be gained with
the standard DEA model. The DEA score for the
inefficient unit is considered as its rank scale. In
order to rank scale the efficient units they allow
the efficient units to receive an efficiency score
greater than 100 percent by dropping the constraint
that bounds the score of the evaluated unit. In
standard DEA, Decision Making Units (DMUs)
are identified as fully efficient and assigned an
efficiency score of unity if they lie on the efficient
frontier. Inefficient DMUs are assigned scores of
less than unity (Yawe, 2010).
F SUPk = F ((x k , y k );T ∗ (γ | −k )).
APPLICATION TO BENCHMARKING
OF INDIAN RAILWAY
CONTAINER BUSINESS
The above-described DEA models are used for
the performance benchmarking of the Indian
Railway container business. The implementation
of DEA however involves recognizing the inputs

Box 1.­

 
T ∗ (γ | −k ) = (x , y ) ∈ m+ × n+ | ∃λ ∈ ∧K −1 (γ ) : x ≥ ∑ λ j x j , y ≤ ∑ λ j y j 
 
 j ≠k j ≠k 

592

and outputs of the units being assessed, selecting
measures for the inputs and outputs, collecting data
on the inputs and outputs, solving the appropriate
models and interpreting the results (Thanassoulis,
Dyso, & Foster, 1987).
Inputs and Outputs/
Performance Indicators
The performance evaluation using DEA starts
with selection of appropriate input and output
measures that can be combined into a composite
index of overall performance. Inputs are basically
the different resources that the firms consume
for its operations while the outputs represent a
set of quantitative measures of results expected
from these firms (George, & Rangaraj, 2008). In
this study, they were chosen based on previous
DEA studies reported in literature and also on the
availability of data. Table 1 highlights the list of
performance indicators used for the study.
Data Analysis
The secondary data from year 1994-95 till 2015-16
has been used for performance evaluation within
CONCOR and shown in Table 2.
The secondary data from all the organizations
has been collected through personal interviews.
However Figure 1 shows methodology adapted
in present study in a flow chart.
Table 1. Performance indicators to be used
S.No. Performance Indicators
1.
Number of Handling
Terminals
2. Number of Employees
3. Number of freight wagons
4. Number of Containers (TEUs)
5. Net Profit (in Crores)
6. TEUs Handled
Sources: Azevedo, Ferreira, Dias, & Palma, 2009; Morris,
Pandey, Raghuram, & Gangwar, 2010; George, & Rangaraj,
2008; Hilmola, 2007
Category: Business and Organizational Research
In order to gain deep insights in the study,
Super-efficiency analysis have been deployed so B
as to verify the results by both CCR and BCC
models. Further depending on whether inputs
and outputs are controllable, a Decision Making
Unit (DMU) can have either an input orientation
or output orientation (George, & Rangaraj, 2008).
As such the study is based on input orientation.
In order to evaluate the performance within
CONCOR the years 1994-95 to 2015-16 have
been the Decision Making Units (DMU’s) along
with respective inputs and outputs in order to
determine the efficiency trends.
To reach the conclusion, Spearman Rank Cor-
relation Coefficient (rs) has been used to correlate
the results shown by CCR and BCC Models as
per the formulae below:
 
 6∑ d 2 
rs = 1 −  
( )
 n n 2 − 1 
wherein, rs varies from -1 to +1 and is weak posi-
tive correlated if its value is between 0 and 0.5 &
strong positive correlated if its value is between 0.5
and 1. Same is the case with negative correlation
when its value varies between 0 and -1.
RESULTS AND DISCUSSION
In this section, results for the performance evalu-
ation within CONCOR from 1994-95 till 2015-16
have been suitably presented to highlight various
Type constraints in order to improve their efficiency.
Input In case of analysis by Super-efficiency Model,
Table 3 showed Efficiency Analysis for CONCOR
Input
by CCR and BCC models for the years 1994-95 to
Input
2015-16 with fluctuation of 75.83% to 109.51%
Input and 93.52% to 1000% respectively. The revelation
Output through efficiency analysis using CCR and BCC
Output models indicated a Spearman Rank Correlation
Coefficient (rs) value of 0.60, which clearly reflects
a strong positive correlation value.
593
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach

Table 2. Secondary Data for CONCOR from 1994-95 till 2015-16

No. of No of
No. of No. of Freight Net Profit (in TEUs
Year Handling Containers
Employees Wagons Crores) Handled
Terminals (TEUs)
1994-95 11 488 3835 7800 23.89 402632
1995-96 14 502 4214 8216 52.23 594118
1996-97 16 546 4558 8802 95.25 703542
1997-98 20 590 5142 9417 115.8 721719
1998-99 22 602 5560 9678 140.66 801946
1999-00 25 628 5672 9850 177.59 903151
2000-01 31 656 5768 9975 216.65 1044728
2001-02 40 781 5845 10156 249.48 1231833
2002-03 42 841 5920 10314 272.85 1383163
2003-04 47 915 6012 10771 367.59 1602119
2004-05 52 988 7582 10874 428.6 1727976
2005-06 54 1036 7762 11745 525.8 1930562
2006-07 59 1080 8577 12812 703.82 2105266
2007-08 61 1134 8421 13517 752.21 2447769
2008-09 63 1176 8668 13576 791.2 2308232
2009-10 64 1129 10194 15579 786.69 2361247
2010-11 66 1147 10666 15754 875.95 2562597
2011-12 68 1164 10988 16109 877.88 2604311
2012-13 71 1198 11770 18680 940.03 2585686
2013-14 71 1325 12111 20984 984.76 2868612
2014-15 73 1331 13111 20247 1047.55 3110756
2015-16 73 1332 13471 20944 786.93 2924046

The years pertaining to lower efficiencies
can be attributed to the lack of infrastructural
facility and their proper management as visible
from potential improvements as in case of CCR
Model. While, in case of BCC Model, the lowest
efficiency has been attributed to the year 1997-
98 since the cargo handlings and exports were
declined on account of incessant rains and floods
causing disruption of traffic movement. Thus
there was insignificant growth into logistic busi-
ness. However, the successive years showed little
better towards growth considering the efficiency
improvement factor may be due to use of better
managerial skills. The overall issues pertaining
to lower performance have been presented at the
end of analysis.
Table 4 and Table 5 again express the potential
improvement by Super-efficiency DEA study for
performance indicators by CCR and BCC models
respectively, which indicates by how much, and
in what areas an inefficient unit needs to improve
in order to be efficient. The negative percentage
shows the amount of reduction needed for high-
lighting the specific variables in order to increase
the efficiency.
The CCR model analysis from Table 4 con-
cluded that throughout the discussed inefficient
years, it was evident that the number of employees
and number of containers have shown highest
requirement for potential improvement with
percentage fluctuation varying between -44.87%

594
 Category: Business and Organizational Research

Figure 1. Methodology for benchmarking CONCOR performance by DEA approach

B

Table 3. Super-Efficiency Analysis within CONCOR

Year Efficiency Ranking Efficiency Ranking

(CCR model) (CCR Model) (BCC Model) (BCC Model)
1994-95 83.24 5 127.27 21
1995-96 96.51 14 104.56 17
1996-97 103.19 19 103.53 16
1997-98 82.81 4 93.52 1
1998-99 84 7 94.89 2
1999-00 83.64 6 96.06 4
2000-01 78.93 2 99.14 8
2001-02 75.83 1 96.91 6
2002-03 81.72 3 98.7 7
2003-04 91.68 10 108.15 19
2004-05 87.75 8 102.49 15
2005-06 90.77 9 99.47 10
2006-07 95.77 13 101.29 12
2007-08 109.51 22 112.11 20
2008-09 104.73 20 105.07 18
2009-10 93.2 11 96.28 5
2010-11 101.98 18 102.25 14
2011-12 99.51 17 99.78 11
2012-13 99.84 16 101.48 13
2013-14 99.32 15 99.34 9
2014-15 109.23 21 1000 22
2015-16 94 12 95.27 3

595
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach

to +9.51% and -47.98% to +6.81% respectively
in comparison to other performance indicators.
However The BCC model analysis from Table
5 concluded that throughout the discussed inef-
ficient years, the number of handling terminals
have shown highest requirement for potential
improvement with percentage fluctuation varying
between -16.62% to +27.27% with requirement
from number of freight wagons also with per-
centage fluctuation ranging between -11.77% to
+12.11% respectively.
This percentage fluctuation in CCR and BCC
models signifies the variation of percentage po-
tential improvement and suitable reduction or en-
hancement in highlighted performance indicators
could have increased the overall performance of
CONCOR for respective inefficient years. Thus the
study from Super-efficiency DEA revealed some
of the following issues which needs to be taken
care of to improve and maintain the performance
level of CONCOR:
• Focus of management remained develop-
ing the particular field instead of mov-
ing step by step in a planned strategy for
all-round growth of the complete set of
activities.
• It is also clear that no planned policy for
infrastructure development was enforced
whereas the licensing norms too added in-
different scenario.

Table 4. Potential improvements performance indicator wise within CONCOR by CCR model through
Super-efficiency analysis (in percent)

No. of Handling No. of Freight No of Containers Net Profit (in

Year No. of Employees TEUs Handled
Terminals Wagons (TEUs) Crores)
1994-95 -16.76 -35.97 -31.98 -35.42 128.17 0
1995-96 -3.49 -8.15 -8.66 -9.53 54 0
1996-97 3.19 -44.87 -34.94 -47.98 148.73 0
1997-98 -17.19 -17.19 -18.11 -17.21 20.1 0
1998-99 -16 -16 -20.2 -17.11 25.15 0
1999-00 -16.36 -16.66 -17.2 -16.36 26.68 0
2000-01 -21.07 -28.35 -21.07 -27.86 56.25 0
2001-02 -24.17 -28.07 -24.17 -30.58 54.7 0
2002-03 -18.28 -24.24 -18.28 -24.97 56.89 0
2003-04 -15.05 -18.88 -8.32 -17.86 33.94 0
2004-05 -17.19 -18.97 -21.59 -12.25 23.9 0
2005-06 -10.91 -13.67 -14.43 -9.23 12.83 0
2006-07 -5.25 -4.23 -8.47 -4.23 0 0
2007-08 9.12 9.51 9.51 6.81 11.49 0
2008-09 1.84 1.43 2.19 4.73 0 11.54
2009-10 -7.89 -6.8 -6.8 -7.36 0 0
2010-11 1.98 1.98 1.57 1.98 0 1.25
2011-12 -3.58 -0.43 -2.89 -0.43 0 0
2012-13 -7.4 -0.16 -0.16 -3.04 0 7.89
2013-14 -0.68 -2.47 -0.68 -11.26 0 1.6
2014-15 9.23 5.15 -3.76 -6.96 0 0
2015-16 -6 -6 -8.47 -9.06 25.06 0

596
 Category: Business and Organizational Research

Table 5. Potential improvements performance indicator wise within CONCOR by BCC model through
super-efficiency analysis (in percent) B
No. of Handling No. of No. of Freight No of Containers Net Profit (in TEUs
Year
Terminals Employees Wagons (TEUs) Crores) Handled
1994-95 27.27 2.87 9.88 5.33 118.63 47.56
1995-96 1.3 4.56 1.92 2.7 32.68 0
1996-97 3.53 -1.46 0.94 -0.71 0.27 0
1997-98 -9.93 -6.48 -8.36 -6.58 0 3.37
1998-99 -10.99 -5.11 -11.75 -6.74 0 0.44
1999-00 -11.35 -3.94 -7.85 -4.57 2.23 0
2000-01 -16.62 -0.86 -2.28 -0.86 10.13 0
2001-02 -15.16 -3.09 -3.09 -3.09 6.33 0
2002-03 -4.82 -1.45 -1.3 -1.3 10.92 0
2003-04 -15.83 -7.58 8.15 3.04 17.76 0
2004-05 -4.49 2.69 -11.77 2.49 0 0
2005-06 -0.6 -1.47 -0.53 -0.53 0 0
2006-07 -3.17 1.29 -4.7 1.29 0 0
2007-08 6.13 6.08 12.11 9.02 11.11 0
2008-09 -0.67 -2.79 5.07 5.07 0 8.13
2009-10 -5.32 -3.72 -3.72 -4.97 0 0
2010-11 2.25 2.25 1.89 2.25 0 1.35
2011-12 -2.25 -0.22 -1.51 -0.22 1.1 0
2012-13 -3.36 1.48 -1.62 -6.68 0 7.02
2013-14 -0.66 -2.43 -0.66 -11.23 0 1.61
2014-15 0 0 0 0 0 0
2015-16 -4.73 -4.73 -8.17 -9 24.64 0

• The declines in the efficiency lead on ac-
count of unplanned expansion of termi-
nals and infrastructure growth haphazardly
without caring competitive strategies.
• The deficient services were due to monop-
oly of CONCOR till 2005, the work culture
generally relied on irregular practices like
pick and choose, bribery, tip to staff.
The strategic weaknesses and unplanned de-
velopment can however be tackled efficiently as
CONCOR has sufficient infrastructure in light
of competition but there is a need to utilize it
optimally and as of now, it seems that to some
extent, proper measures have started being taken
to enhance the performance of the organization
with reference to concurrent efficiency measures.
However, it cannot be denied that the reliability
of data is a primary concern which if forged will
not lead to highlight the true issues, which reduce
the efficiency.
CONCLUSION
The Super-Efficiency DEA study identified ef-
ficiency fluctuation between 75.83% to 109.51%
(CCR Model) and 93.52% to 1000% (BCC Model)
owing to lack of efficient staff and operational
planning in rake management in addition to

597
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach
haphazard infrastructure growth viz. number of
handling terminals, number of handling equip-
ments and containers without caring for optimal
requirements and managing properly. The same
being concurrent to licensing policy norms,
which needs to be thoroughly formulated in a
phased and realistic manner to boost up the trade
and industry within the set of inputs and outputs
considered. It will also be beneficial if CONCOR
focuses on enhancing the productivity of staff by
providing them suitable reading to enhance their
skill level which ultimately will lead to enhanced
performance level.
LIMITATIONS
Though a lot of advantages, there are limitations
for this work as the private operators engaged in
the transportation business of containers could
not be directly approached owing to time and
cost constraints. Only government operator being
CONCOR has been considered for the internal
performance evaluation over the period of time.
Further the reliability of data provided by the
operator for needful research is based merely on
the information and available sources.
FUTURE RESEARCH DIRECTIONS
The present study can be extended to other pri-
vate operators e.g. Adani Logistics, Reliance
Infrastructure, etc. operating in other parts of
India for their individual and competitive perfor-
mance comparisons. It can also be expanded by
considering some more performance indicators
viz. Cost, Service/quality, Productivity, etc. to
gain deeper insights to enhance the performance
of the organizations.
598
REFERENCES
Azevedo, S. G., Ferreira, J., Dias, J. C. Q., &
Palma, S. F. (2009). Performance evaluation of the
main terminal containers in the Iberian seaports:
A benchmarking approach. POMS, 20th Annual
Conference, Orlando, FL.
Beriha, G. S., Patnaik, B., & Mahapatra, S. S.
(2011). Safety performance evaluation of Indian
organizations using data envelopment analysis.
Benchmarking: An International Journal, 18(2),
197–220. doi:10.1108/14635771111121676
Bogetoft, P., & Otto, L. (2011). Additional topics
in DEA - Benchmarking with DEA, SFA, and R.
International Series in Operations Research &
Management Science, 115-153.
Chandraprakaikul, W., & Suebpongsakorn, A.
(2012). Evaluation of logistics companies using
data envelopment analysis. 4th IEEE International
Symposium on Logistics and Industrial Informat-
ics, 81-86. doi:10.1109/LINDI.2012.6319466
Charnes, A., Cooper, W. W., & Rhodes, E. (1978).
Measuring the efficiency of decision making units.
European Journal of Operational Research, 2(6),
429–444. doi:10.1016/0377-2217(78)90138-8
de Koster, M. B. M., Balk, B. M., & van Nus, W.
T. I. (2009). On using DEA for benchmarking
container terminals. International Journal of
Operations & Production Management, 29(11),
1140–1155. doi:10.1108/01443570911000168
Epstein, M. K., & Henderson, J. C. (1989). Data
envelopment analysis for managerial control and
diagnosis. Decision Sciences, 20(1), 90–119.
doi:10.1111/j.1540-5915.1989.tb01399.x
Farrell, M. J. (1957). The measurement of produc-
tive efficiency. Journal of the Royal Statistical
Society. Series A (General), 120(3), 253–290.
doi:10.2307/2343100

Gangwar, R., & Raghuram, G. (2010). Container
train operators in India: Problems and prospects.
Research and Publications, Indian Institute of
Management. IIM-A.
George, S. A., & Rangaraj, N. (2008). A perfor-
mance benchmarking study of Indian railway zones.
Benchmarking: An International Journal, 15(5),
599–617. doi:10.1108/14635770810903178
Ghosh, P., & Bandyopadhyay, G. (2014). Effi-
ciency and ranking of operating no-frill airlines in
Eastern India: An application of data envelopment
analysis (DEA). 2nd International Conference on
Business and Information Management (ICBIM),
136-140. doi:10.1109/ICBIM.2014.6970975
Hilmola, O. P. (2007). European railway freight
transportation and adaptation to demand decline -
Efficiency and partial productivity analysis from
period of 19802003. International Journal of Pro-
ductivity and Performance Management, 56(3),
205–225. doi:10.1108/17410400710731428
Hilmola, O. P. (2011). Benchmarking efficiency
of public passenger transport in larger cities.
Benchmarking: An International Journal, 18(1),
23–41. doi:10.1108/14635771111109805
Holden, R., Xu, B., Greening, P., Piecyk, M., &
Dadhich, P. (2016). Towards a common measure
of greenhouse gas related logistics activity using
data envelopment analysis. Transportation Re-
search Part A, Policy and Practice, 91, 105–119.
doi:10.1016/j.tra.2016.06.001
Kitalo, M. M., & Hilmola, O. P. (2010). Analys-
ing the future of railway freight competition: A
delphi study in Finland. Foresight, 12(6), 20–37.
doi:10.1108/14636681011089961
Kunadhamraks, P., & Hanaoka, S. (2008). Evalu-
ating the logistics performance of intermodal
transportation in Thailand. Asia Pacific Journal
of Marketing and Logistics, 20(3), 323–342.
doi:10.1108/13555850810890084
Category: Business and Organizational Research
Lee, T., Yeo, G. T., & Thai, V. V. (2014).
Environmental efficiency analysis of port cit- B
ies: Slacks-based measure data envelopment
analysis approach. Transport Policy, 33, 82–88.
doi:10.1016/j.tranpol.2014.02.009
Li, W. (2005). Research on the performance evalu-
ation of logistics activities. China USA Business
Review, 4(4), 53–55.
Lovell, C. A. K., & Rouse, A. P. B. (2003). Equiva-
lent standard DEA models to provide superef-
ficiency scores. The Journal of the Operational
Research Society, 54(1), 101–108. doi:10.1057/
palgrave.jors.2601483
Lupi, P., Manenti, F., Scialà, A., & Varin, C. (2011).
On the assessment of regulators efficiency: An
application to European telecommunications. Info,
13(1), 61–73. doi:10.1108/14636691111101883
Morris, S., Pandey, A., Raghuram, G., & Gangwar,
R. (2010). Introducing competition in container
movement by rail. Research and Publications,
Indian Institute of Management Ahmedabad.
Napa, J. (2006). CONCOR: No more a mo-
nopoly. IBS Center for Management Research,
CLINDM/004.
Phadnis, S. S., & Kulshrestha, M. (2012). Evalu-
ation of irrigation efficiencies for water users as-
sociations in a major irrigation projects in India by
DEA. Benchmarking: An International Journal,
19(2), 193–218. doi:10.1108/14635771211224536
Portela, M. C. A. S., Camanho, A. S., &
Borges, D. N. (2011). BESP: Benchmarking
of Portuguese secondary schools. Benchmark-
ing: An International Journal, 18(2), 240–260.
doi:10.1108/14635771111121694
CARE Ratings. (2009). Container Corporation of
India Limited. Careview, 353-354.
Shao, Y., & Sun, C. (2016). Performance evalu-
ation of Chinas air routes based on network data
envelopment analysis approach. Journal of Air
Transport Management, 55, 67–75. doi:10.1016/j.
jairtraman.2016.01.006
599
Benchmarking Performance Indicators of Indian Rail Freight by DEA Approach
Thanassoulis, E., Dyso, R. G., & Foster, M. J.
(1987). Relative efficiency assessment using DEA:
An application to data on rates departments. The
Journal of the Operational Research Society,
38(5), 397–411. doi:10.1057/jors.1987.68
Yawe, B. L. (2010). Hospital performance evalua-
tion in Uganda: A super-efficiency data envelope
analysis model. Zambia Social Science Journal,
1(1), 79–105.
ADDITIONAL READING
Chandraprakaikul, W., & Suebpongsakorn, A.
(2012). Evaluation of logistics companies us-
ing data envelopment analysis. In 4th IEEE
International Symposium on Logistics and
Industrial Informatics, 81-86. doi:10.1109/
LINDI.2012.6319466
Ghosh, P., & Bandyopadhyay, G. (2014). Ef-
ficiency and ranking of operating no-frill air-
lines in Eastern India: An application of data
envelopment analysis (DEA). In 2nd Interna-
tional Conference on Business and Information
Management (ICBIM), 136-140. doi:10.1109/
ICBIM.2014.6970975
Kunadhamraks, P., & Hanaoka, S. (2008). Evalu-
ating the logistics performance of intermodal
transportation in Thailand. Asia Pacific Journal
of Marketing and Logistics, 20(3), 323–342.
doi:10.1108/13555850810890084
600
KEY TERMS AND DEFINITIONS
Benchmarking: It is a management tool
through which a plan for evaluation, measurement,
and improvement is implemented.
Container Corporation of India: Container
Corporation of India Ltd. (CONCOR) is a Cat-
egory I Miniratna Public sector undertaking under
the Indian Ministry of Railways. Incorporated in
March 1988 under the Companies Act, Concor
commenced operations in November 1989 taking
over an existing network of seven inland container
depots (ICDs) from Indian Railways.
Data Envelopment Analysis: Data envelop-
ment analysis (DEA) is a nonparametric method
in operations research and economics for the
estimation of production frontiers. It is used to
empirically measure productive efficiency of
decision making units (or DMUs).
Indian Railways: Indian Railways (IR) is an
Indian state-owned enterprise, owned and operated
by the government of India through the Ministry
of Railways.
Performance Evaluation: The analysis in
terms of initial objectives and estimates, and
usually made on site, of accomplishments using
an automatic data-processing system, to provide
information on operating experience and to iden-
tify corrective actions required, if any.
Super-Efficiency: The Super-efficiency
analysis allows calculating efficiency improve-
ments for efficient units.