Young-Tae Chang

A game-theoretic analysis of competition among container port hubs: the case of Busan and Shanghai [1]

Countries throughout the world, and especially within Asia, are investing heavily in container port infrastructure in the hopes of capturing a larger share of global shipping activity for their economies. Many existing ports are emphasizing developing the capacity to serve as a hub port, building deepwater berths with large terminals to facilitate transfer of containers from feeder ships to mother ships for intercontinental transport. We develop a game-theoretic best response framework for understanding how competitor ports will respond to development at a focus port, and whether the focus port will be able to capture or defend market share by building additional capacity. We apply this model to investment and competition currently occurring between the ports of Busan and Shanghai.

Environmental efficiency of ports: a Data Envelopment Analysis approach

Numerous studies have analyzed the productivity, efficiency, and competitiveness of ports. However, empirical studies on the environmental efficiency of ports have not yet been carried out, since all previous studies have not considered the undesirable outputs that ports generate, for instance, CO2 emissions. To fill the gap in the literature, the objective of this study is to estimate environmental efficiency of ports. More specifically, this paper intends to analyze environmental efficiency of ports in Korea and to estimate the potential CO2 emission reduction by ports in the country. The main methodology is a Slacks-Based Measure Data Envelopment Analysis (SBM-DEA) model. Data, on labor, capital, and energy used as major inputs of the port sector; on cargo tonnage and vessel tonnage handled as desirable outputs; and on CO2 emissions as an undesirable output, were collected and estimated. The SBM-DEA model was able to provide us with a more comprehensive efficiency of combining economic performance and environmental performance and was also able to capture slack values of input excess and undesirable output excess (CO2) as well as desirable output shortage. Using the model and the data, it was found that Korean ports are deemed to be economically inefficient, but environmentally efficient when considering economic and environmental performances simultaneously.

OPTIMIZING THE TRANSPORTATION OF INTERNATIONAL CONTAINER CARGOES IN KOREA

This paper considers a multimodal transportation problem, which is the problem of determining the transportation flow, i.e. volume of container cargoes, and the transportation mode in each trade route, for the objective of minimizing the sum of shipping and inland transportation costs. The problem takes account of two restrictions: maximum cargo volumes capacitated at each seaport and maximum number of vehicles available at each transportation mode. To solve optimally the problem, this paper employs a mixed integer programming, which is an operations research technique. A case study is performed on the container cargo data in Korea and we draw several implications to improve efficiency in the transportation of international trade cargoes in Korea.

Economic impact of cruise industry using regional input–output analysis: a case study of Incheon

Asian countries are witnessing a newly emerging cruise industry. This study presents a methodology for estimating various aspects of the cruise industry’s economic impact using regional input–output (I-O) analysis. The methodology is applied to a study of the Port of Incheon (POI) that highlights the effects on both the regional and national economies as well as the interaction between the two regarding production induction, employment, and value added. The effects are analyzed under both the current situation and a scenario that includes development of shopping centers and amenities in Incheon in the future. The overall economic impact of the cruise sector on Incheon is relatively small compared to the impact on well-established cruise markets. This is because POI functions as a port of call for cruise lines, instead of a base port or home port, and earns cruise-related revenue mostly from the expenditures of passengers and crews. Moreover, cruise ship visits to POI mostly benefit the Seoul economy in terms of added value and job creation. The development scenario provides much greater economic benefits to Incheon and therefore justifies future development by POI and the city government.

Optimization Model for Transportation of Container Cargoes considering Short Sea Shipping and External Cost: South Korean Case

To alleviate harm to the environment, short sea shipping (SSS) is gaining popularity in transportation policy formulation as an alternative transport mode for ecofriendly and cost-efficient transportation. There have been no studies of how to optimize intermodal container movement incorporating environmental aspects into SSS networks. This paper analyzes an intermodal transportation problem of international container cargoes while incorporating the external costs of the modes into an optimization model in South Korea. The objective of the problem is to minimize the total logistic costs, that is, shipping and land transportation costs, as well as external costs such as air pollutants (particulate matter, nitrogen oxide, sulfur dioxide, and volatile organic compounds) and greenhouse gases (carbon dioxide). The results of the model show a strong foundation for encouraging more environmentally friendly modes, such as SSS and rail, and a well-balanced modal shift if transport policy is formulated in this direction.

Measuring port efficiency using bootstrapped DEA: the case of Vietnamese ports

ABSTRACT Standard data envelopment analysis (DEA) tends to be sensitive to the number of variables of a chosen sample, and it is unable to account for their random nature. Standard DEA can exhibit statistical inconsistency, biased results, and an arguable inference process. Thus, in this study, an efficiency evaluation method is used to overcome these limitations, especially since no studies of port efficiency have addressed this issue. This study applies bootstrapped DEA to a sample of the 43 largest Vietnamese ports and compares the results with those from stochastic frontier analysis (SFA) and standard DEA. The results show that while the efficiency scores obtained from the three methods provide useful and consistent measures of the ports’ efficiency, they differ significantly. Furthermore, while the efficiency scores produced by bootstrapped DEA are consistent, unbiased, and not sensitive to the sample size, standard DEA and SFA yield efficiency scores that are much larger than bootstrapped DEA. In addition, bootstrapped DEA provides the confidence intervals for efficiency scores and allows for hypothesis tests of port performance.

PREDICTABILITY OF THE DRY BULK SHIPPING MARKET BY BIFFEX..

When BIFFEX (Baltic International Freight Futures Exchange) came ijnto existence in 1985, many critics were perssimistic that it would have a successful future. In spite of the eight years surival of BIFFEX, a recent empirical study shows that BIFFEX is not widely used a s a hedging tool ijn the shipping community, unlike the expectations and recommendations of many experts. one reason could be that BIFFEX may not be considered peredictive of the physical market and, therefore, investors might be suspicious of the hedging effect. The objective of this paper is to test this argument by exdamining the predicatability of BIFFEX in the dry bulk shipping market up to six months. Prior to the real situation, the explainable power ranges from 90% in a one-month advance to 23% in a six-month advance.

Estimation of Optimal Handling Capacity of a Container Port: An Economic Approach

Port planners have to make decisions on optimal berth capacity for container port development. The main purpose of this paper is twofold. One is to review the current practices adopted by selected major ports in Asia in estimating berth and port capacities in their planning decisions. The other is to suggest a new approach to estimate the optimal capacity of a berth/port from the perspective of a national economy and to show how the traditional approach can integrate economic factors. Findings suggest that port planners should look into incurring costs of not only the construction, but also the opportunity costs of ships and cargo when deciding to use port facilities to full capacity.

Efficiency analysis of major cruise lines

Abstract Three major cruise lines account for 82% of the total market share. Their financial statements show different results between the operating incomes and net incomes over time. To examine the major causes of the differences, this study measured the efficiency of the top three cruise lines to develop a network DEA model to analyze the cruise operations at two stages, namely operating and non-operating stages. In addition, the determinants of the efficiencies were examined using a bootstrapped-truncated regression model. Overall, cruise lines were efficient at the operating stage, but varied widely in the efficiency of the non-operating stage. Cruise lines attempting high capacity expansion were relatively inefficient because of the heavy interest payments arising from the high debt-to-capital ratio. Moreover, the neglected hedging policy regarding the financial risks also contributed to the inefficiency.

Assessing Port Service Quality by Process Component: The Case of Korean and Chinese Ports

Studies on port service quality are quite limited and so far no study has yet been done to develop a measurement of port service quality by port service process component from the perspective of the shipping lines. The objective of this study is to develop a measurement of port service quality by port service process component and to evaluate the service levels of competing container ports in Korea and China. Using literature review, confirmatory factor analysis and analytic hierarchy process method based on 82 respondents, the findings reveal that the Chinese ports enjoy a higher service level than the Korean ports due to their higher scores in timeliness and price acceptability, which are most critical factors in port service quality. The current empirical study is a meaningful experiment integrating port service quality factors and port service process and consequently, can present more detailed information about the strengths and weaknesses of each port and provide a more useful basis to improve their service competitiveness.