An investigation of efficiency and productivity of selected shipping companies in 5 ASEAN countries

Abstract

Shipping companies continue to invest in efforts to improve the efficiency and productivity of sea transportation, or to maintain a highly competitive market. However, the adverse effects of the economic downturn on the global maritime industry raise questions about the sustainability of this industry. Literature has highlighted the failures of shipping companies due to insufficient working capital, high operational costs, slow recovery of shipping rates and, consequently, lost customers. These could be avoided if investment and financial operations were efficiently controlled. This research examines efficiency and productivity, which affect the operations of shipping companies. The study provides elucidation on the concepts of efficiency and productivity to benefit shipping companies, which are run with high capital and resources. Studying efficiency and productivity shows that there are many techniques for measuring and increasing efficiency, and thus productivity. In this study, the techniques most suitable for the shipping context are selected and used. This study measures the efficiency and productivity of 55 shipping companies, selected from five ASEAN nations, and includes measurement data from secondary research using quantitative techniques. Efficiency and productivity are calculated based on an output-oriented approach. To increase the efficiency and productivity of shipping companies, the author suggests reducing capital and debt expenditure. The study concludes that adoption of technology can help shipping companies improve managerial decision-making, either by adjusting operational scale or through better use of resources to suit the nature of shipping operations. The outcome of this research is a better understanding of the concepts of efficiency and productivity in the specific context of shipping companies.