Recently, observing outcome of business is becoming an important issue in order for a company to be survived and flourished in rapidly changing environment. It is necessary to evaluate productivity and efficiency which is defined as ratio of the input and output so as to improve business performance.
This study identifies an inefficient container terminal operating company, and evaluates the level of business performance of terminal operating companies by using DEA(Data Envelopment Analysis).
DEA has been used to measure the performance of organizations such as banks, insurance companies, universities and hospitals. Recently DEA has been widely used to evaluate efficiency in the port industry. This paper implements DEA by using labor cost, lent cost, and management expense as inputs and container throughput, sales, and profit as outputs for 18 container terminal operating companies in Korea.
According to the results of CCR input-orientation and output-orientation model based on input and output data in 2009, it was found that the efficiency value of 11 container terminal operating companies out of 18 companies were over 1.00.
However the results of BCC input-orientation and output-orientation model showed that 14 container terminal operating companies's efficiency value were over 1.00.
The ratio of operating profits against sales is gradually decreasing from 2007 to 2009, which means that output variables have no change but input variables are increasing. Even though the number of container operators increased from 2007 to 2009, container throughput was almost same so that competition among container operators was getting fierce. This caused a drop in price of container cargo handling charges, and forced terminal operators to accelerate management deterioration. According to the results of this study, an institutional plan needs to be implemented to optimize input variable depending on the changes of container throughput.