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

Abstract

Purpose

This 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/approach

In 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.

Findings

The 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/implications

The 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/value

This 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.

Citation

Kuo, K.-C., Lu, W.-M., Kweh, Q.L. and Le, M.-H. (2020), "Determinants of cargo and eco-efficiencies of global container shipping companies", The International Journal of Logistics Management, Vol. 31 No. 4, pp. 753-775. https://doi.org/10.1108/IJLM-01-2020-0016