A New Approach in Benchmarking Seaport Efficiency and Technological Change

Abstract

Export-led strategies and the globalization of production, transport and distribution have intensified competition among ports, turning it into competition among global supply chains. Seaport efficiency and productivity have thus become issues of essence for most ports, particularly in the lucrative business of container handling. The paper uses the innovative Luenberger indicator to analyze seaport efficiency and productivity growth in a sample of 16 Middle East and East African seaports in the period 2005-2007. Measurements of both technical efficiency change (managerial efficacy) and technological change (investment) are presented. Although results are rather mixed among ports, the paper finds a general decline in port productivity, with a possible subsequent decline in skills and management efficiency. With a few notable exceptions, ports in the region demonstrate a worrying decline in technical efficiency, often in spite of positive developments in the adoption of new technology. Regional governments are advised to assign the requisite political priorities, and any necessary budgets, to the development of their port sectors in the clear understanding that ports constitute the most important component of global supply chains which, in their turn, are the sole facilitators of export led growth and integration of developing countries in the global economy.