Port privatization,efficiency and competitiveness: Some empirical evidence from container ports (terminals)

Few studies have investigated the quantitative relationship between port ownership structure and port efficiency with mixed results. This study applies a stochastic frontier model proposed by Battese and Coelli [Battese, G.E., Coelli, T.J., 1995. A model for technique inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20, 325–332], which incorporates the inefficiency effect, to show whether port privatization is a necessary strategy for ports to gain a competitive advantage. While this stochastic frontier model has been used to a wide number of industries where the technical inefficiency effect is required, this method has rarely been employed to port industry. This study also investigates the determinants of port competitiveness. Both the principal component analysis (PCA) and the linear regression model are used to examine the effects of identified key factors on port competitiveness. Based on a sample of selected container terminals around the world, the results of this study have shown that private sector participation in the port industry to some extent can improve port operation efficiency, which will in turn increase port competitiveness. Another important determinant of port competitiveness is the adaptability to the customers’ demand. All these results provide some policy implications and guidance for port authorities and port operators in formulating effective strategies to improve their competitiveness vis-à-vis rivals.     

Technical characteristics and efficiency of urban bus companies: The case of Spain

The aim of the present study is twofold. First, to provide new information concerning the technical characteristics of urban bus companies on the basis of a sample of medium and large-size cities in Spain. Second, to analyze the degree of efficiency of those companies and to quantify the reasons for this efficiency. The results should be useful in evaluating possible changes in public policies relating to urban transport, specifically changes in the way the market is organized and in pricing.The analysis is carried out by estimating a cost function. The sample is made up of a panel data set consisting of observations of nine Spanish companies that operated during the period 1983–1995. The specified functional form is translogarithmic. The output unit of measure adopted is bus*kms run. The cost function includes the network length for each company, thus permitting evidence concerning economies of density and economies of scale.The use of panel data allows us to estimate the cost function, taking into account that each company is affected by the specific characteristics of each individual city, the different features of the network in question and by different levels of efficiency. The economies of scale have been calculated, taking into account that the features of the network and of the city – represented by their specific individual effect – will vary with the company's level of output.Finally, an analysis is made of the relative productive efficiency of the companies, as well as of the variables likely to influence that efficiency.     

A multi‐objective approach to the parcel express service delivery problem

Parcel express service in many countries assumes door‐to‐door delivery of parcels and small packages in the fastest possible way. Delivery companies usually organize hub delivery networks, as flows between hubs are characterized by the economy of scale effect. At hubs, parcels are exchanged across vans, trucks, and planes. To organize parcel delivery in a specific region, the parcel delivery company must make appropriate decisions about the total number of parcel delivery hubs, their locations, and the allocation of demand for facilities' services to facilities. These issues are modeled in this paper as a multi‐objective problem. The model developed is based on compromise programming and genetic algorithms. We also demonstrate in the paper an interactive manner in which a defined problem can be solved. The proposed model could be implemented in large‐scale networks. The paper also shows a case study of parcel delivery service in Serbia. Copyright © 2013 John Wiley & Sons, Ltd.     

Stochastic optimization approach for the car placement problem in ridesharing systems

With the increasing fuel prices and the pressure towards greener modes of transportation, ridesharing has emerged as an alternative to private car ownership and public transportation. In this paper, we focus on a common destination ridesharing system which is of interest in large organizations such as companies and government offices. Particularly, such organizations are looking at using company owned vehicles to offer a ridesharing service by which employees carpool to work thus leading to several benefits that include decreasing pressure on on-campus parking spaces, lowering localized on-campus congestion, in addition to offering a greener transportation mode while lowering transportation costs for employees. Based on discussions with our industry partners, optimizing the distribution of limited number of company vehicles while insuring robustness against unlikely vehicle unavailability is of critical importance. Thus in this paper, we present a stochastic mixed integer programming model to optimize the allocation of shared vehicles to employees while taking into account the unforeseen event of vehicle unavailability which would require some participants to take own vehicles or rerouting of existing vehicles. Since solving the proposed model to optimality is computationally challenging for problems of large sizes, we also propose a heuristic that is capable of finding good quality solutions in limited computational time. The proposed model and heuristic are tested on several instances of varying sizes showing the computational performance. Finally, a test case based on the city of Rome, Italy is presented and insights related to vehicle distribution and travel time savings are discussed.     

Competitive tendering versus performance-based negotiation in Swiss public transport

The purpose of this study is to assess differences in the levels of cost efficiency of bus lines operated under competitively tendered contracts and performance-based negotiated contracts. Following the revision of the Swiss railways act in 1996, regional public authorities were given the choice between two different contractual regimes to procure public passenger transport services. We directly compare the impact of competitive tendering and performance-based negotiation by applying a stochastic frontier analysis to the complete dataset of bus lines (n = 630) operated by the main Swiss company (Swiss Post) at the same time (in 2009) throughout the country. The overall results show that the differences in the levels of cost efficiency between the two contractual regimes are not significant. Our findings are in line with recent evidence of cost convergence between competitive tendering and performance-based negotiation, and suggest that the practice of using both contractual regimes is challenging for the operators in terms of competitive pressure. The threat of competitive tendering may have a disciplining effect on negotiation since it prevents bus companies from bargaining inadequate rents and inducing asymmetric information advantages.     

Performance-based quality contracts in bus service provision

Institutional reform of the bus sector is a topical discussion item in a number of countries at present. A specific focus is on ensuring a value for money (VM) regime to identify the benefits to society associated with each dollar of subsidy support from government. This paper promotes the position that a performance-based contracting (PBC) regime offers the best prospects of achieving a system-wide VM outcome. It proposes a reward system for bus operators that combines payment for delivering a minimum level of service (MSL), that meets government community service obligations, plus an incentive regime that rewards operators for patronage increases (above MSL patronage levels). The patronage incentive is based on expected user and external benefits deriving from service improvements and patronage increases. Cost benchmarking at relevant best practice levels is proposed as essential to ensure remuneration is based on efficient cost levels. The paper argues that a PBC approach is consistent with maximising social surplus from public transport provision across a geographic area, for any given budget constraint and regulatory imposed minimum service levels. The main alternative, competitive tendering (CT), is argued to be less attractive than PBCs in terms of securing the maximum social surplus to the community, given the total amount of subsidy support available, although CT is an appropriate non-compliance condition. This paper is a companion to Hensher and Houghton [Hensher, D.A., Houghton, E., Performance-based contracts for the bus sector: delivering social and commercial value for money, Trans. Res. B, in press] that details the economic framework and an application of PBCs.     

Analyzing the gap between the QOS demanded by PT users and QOS supplied by service operators

This research evaluated the effectiveness of tendered bus public transportation (PT) in improving the attractiveness of that service in order to promote sustainable mobility. This was accomplished by characterizing the gap between the quality of service (QOS) supplied by contract regimes and that which is demanded by passengers. Analysis of a customer satisfaction survey aimed at bus users provided insight into their ranking of 14 QOS parameters while 13 active service contracts were analyzed for their impact on QOS. In-depth interviews with relevant experts completed the complex narrative that is Israel’s policy of privatization in PT. Both qualitative and quantitative analyses helped identify those QOS parameters most in demand by passengers and impacted by contracts. The results show that the gap is minimal, high demand parameters receive increased priority in contracts. In addition this research documented an evolution in the method contracts employed to provide QOS. Late model contracts define an increasingly higher minimum QOS; but also strongly limit the operator’s ability to make service changes. This is a trend which should improve QOS in Israel but reduce the incentive for operator enacted QOS initiatives. Despite its obvious success to date, it might be time to change again the contract regime for the provision of competitive bus services in Israel.     

Productivity growth in European railways: a new approach

The paper develops a model to represent the cost structure of European railways based on a general index of technical change, which allows completely general estimation of productivity growth. The estimated model is based on a variable cost function for panel data, which allows for heterogeneity in spite of previous approaches in the railway economics and general index model literature which adopt the assumption of common technical parameters across countries.     

Liner container assignment model with transit-time-sensitive container shipment demand and its applications

This paper proposes a practical tactical-level liner container assignment model for liner shipping companies, in which the container shipment demand is a non-increasing function of the transit time. Given the transit-time-sensitive demand, the model aims to determine which proportion of the demand to fulfill and how to transport these containers in a liner shipping network to maximize the total profit. Although the proposed model is similar to multi-commodity network-flow (MCNF) with side constraints, unlike the MCNF with time delay constraints or reliability constraints that is NP-hard, we show that the liner container assignment model is polynomially solvable due to its weekly schedule characteristics by developing two link-based linear programing formulations. A number of practical extensions and applications are analyzed and managerial insights are discussed. The polynomially solvable liner container assignment model is then applied to address several important decision problems proposed by a global liner shipping company.     

Estimating the inefficiency in the Norwegian bus industry from stochastic cost frontier models

A stochastic cost frontier function based on data from 170 of the 175 Norwegian subsidized bus companies is estimated under two alternative presumptions regarding the distribution of the inefficency among the bus operators. When the inefficiency is assumed to be half-normally distributed, the average inefficiency in the industry is estimated to be 13.7 per cent. This calculated value is nearly halved (7.2 per cent) when the exponential distribution is applied, while the ranking of the companies according to inefficiency is unchanged. By regressing the estimated inefficiency values for each company on some exogenous variables describing its ownership structure and the subsidy policy which it faces, it is seen that inefficiency of the companies which negotiate with the public authorities over the subsidy amounts is slightly higher than the inefficiency of the companies which face a subsidy policy based on cost norms. Our analysis gives, however, no significant differences in the efficiency between privately owned bus companies and publicly owned bus operators, and shows only minor economies of scale.     

Collaborative truck scheduling and appointments for trucking companies and container terminals

Appointment systems for truck arrivals at container terminals have been applied in many ports to reduce truck congestion. This study suggests a new appointment process by which trucking companies and terminals collaboratively determine truck operation schedules and truck arrival appointments. This study formulates a mathematical model involving a sub-problem for each trucking company to determine the optimal dispatching schedules for trucks and the other sub-problem for the terminal to estimate the expected truck system time in each time interval. An iterative collaboration process is proposed based on a decomposed mathematical formulation. Numerical experiments are conducted to investigate the performance of the decision process and the robustness of the process in practical operation conditions.     

Flexing service schedules: Assessing the potential for demand-adaptive hybrid transit via a stated preference approach

This paper assesses the demand for a flexible, demand-adaptive transit service, using the Chicago region as an example. We designed and implemented a stated-preference survey in order to (1) identify potential users of flexible transit, and (2) inform the service design of the flexible transit mode. Multinomial logit, mixed-logit, and panel mixed-logit choice models were estimated using the data obtained from the survey. The survey instrument employed a d_p-efficient design and the Google Maps API to capture precise origins and destinations in order to create realistic choice scenarios. The stated-preference experiments offered respondents a choice between traditional transit, car, and a hypothetical flexible transit mode. Wait time, access time, travel time, service frequency, cost, and number of transfers varied across the choice scenarios. The choice model results indicate mode-specific values of in-vehicle travel time ranging between $16.3 per hour (car) and $21.1 per hour (flexible transit). The estimated value of walking time to transit is $25.9 per hour. The estimated value of waiting time at one’s point of origin for a flexible transit vehicle is $11.3 per hour; this value is significantly lower than the disutility typically associated with waiting at a transit stop/station indicating that the ‘at-home’ pick-up option of flexible transit is a highly desirable feature. The choice model results also indicate that respondents who use active-transport modes or public transit for their current commute trip, or are bikeshare members, were significantly more likely to choose flexible and traditional transit than car commuters in the choice experiments. The implications of these and other relevant model results for the design and delivery of flexible, technology-enabled services are discussed.     

Evaluating efficiency in the Norwegian bus industry using data envelopment analysis

This paper focuses on the performance of Norwegian bus companies subsidized by the government. The performance is evaluated from a productive efficiency point of view. The framework is that of a deterministic non-parametric Data Envelopment Analysis (DEA) approach to efficiency measurement. In this context several important issues are addressed: efficiency rankings, distribution and scale properties in the bus industry, potentials for efficiency improvements in the sector, the impact of ownership, area of operation and scope, and ways of improving efficiency in the sector. The findings show that the average bus company exhibits increasing return to scale in production of its services. The extent of such returns however vary, with size and is more prevalent among smaller companies. The average bus company is found to have a considerable input saving potential of about 28 percent. Neither economies of scope nor company ownership are found to have an influence on company performance. It is suggested that geographical factors need a closer attention in future research. The implications of DEA results are discussed and concluding remarks offered.     

Stable ride-sharing matching for the commuters with payment design

Ride-sharing enables reduction of private car usage for commuting. This paper proposes a stable matching model for the ride-sharing which aims to minimize the travel cost of all commuters. A payment for the ride-sharing is designed considering the equity and incentive. An algorithm based on the deferred acceptance algorithm is proposed for the model. To verify the model and algorithm, cases with different scales are presented based on Dalian. The results illustrate that the compensation, time window and driver-to-rider ratios can affect the successful matching rate.

     

Safety Management Evaluation in Bus and Coach Companies

Abstract

In recent years, different initiatives have been carried out to develop Safety Management System guides or standards for coach and bus companies. They all consist of a set of safety and management requirements to be followed by organizations. However, none of them offers a complete set of tools to evaluate the safety level of the company and find the main weak points in order to improve them. The INSIA (Automotive Research Institute of Madrid, Spain) has developed a complete model that includes not only a set of elements that determine the safety level of the company but also a set of indicators and criteria to evaluate these elements by a team of auditors. The model allows companies to measure their safety level, find the weakest points and propose improvement actions.     

A subadditivity test for the cost function of the principal European railways

The objective of this paper is the comparison of the efficiency levels for a set of European rail companies in monopoly situations with respect to hypothetical duopoly situations. More specifically, the aim is to test whether the operating costs function of such companies is subadditive. A cost function is subadditive when a single firm can produce all relevant output vectors cheaper than two or more firms. In order to do so the test developed by Evans and Heckman (1984) will be used. It was applied for the American phone company Bell System to assess the convenience of separating the management of local and long-distance services. The results indicate that at least for the companies of a greater size, an efficiency increase (as measured by lower costs), would be obtained from the separation of the current companies in two different companies of a lower size. Besides, these efficiency gains are greater when the two new companies specialize their production, either on passenger or on freight traffic.     

Estimating the most likely space–time paths,dwell times and path uncertainties from vehicle trajectory data: A time geographic method

Global Positioning System and other location-based services record vehicles’ spatial locations at discrete time stamps. Considering these recorded locations in space with given specific time stamps, this paper proposes a novel time-dependent graph model to estimate their likely space–time paths and their uncertainties within a transportation network. The proposed model adopts theories in time geography and produces the feasible network–time paths, the expected link travel times and dwell times at possible intermediate stops. A dynamic programming algorithm implements the model for both offline and real-time applications. To estimate the uncertainty, this paper also develops a method based on the potential path area for all feasible network–time paths. This paper uses a set of real-world trajectory data to illustrate the proposed model, prove the accuracy of estimated results and demonstrate the computational efficiency of the estimation algorithm.     

Incorporating uncertainty into short-term travel time predictions

To improve the quality of travel time information provided to motorists, there is a need to move away from point forecasts of travel time. Specifically, techniques are needed which predict the range of travel times which motorists may experience. This paper focuses on travel time prediction on motorways and evaluates three models for predicting the travel time range in real time as well as up to 1 h ahead. The first model, termed lane by lane tracing, relies on speed data from each lane to replicate the trajectories of relatively slow and relatively fast vehicles on the basis of speed differences across the lanes. The second model is based on the relationship between mean travel time (estimated using a neural network model) and driver-to-driver travel time variability. The results provide insight into the relative merits of the proposed techniques and confirm that they provide a basis for reliable travel time range prediction in the short-term prediction context (up to 1 h ahead).     

Efficient contracting and incentive agreements between regulators and bus operators: The influence of risk preferences of contracting agents on contract choice

Contracts that govern transactions between regulators and operators are an important feature of service delivery in public transport. This paper reviews the literature on efficient contracting in general and its application to public transport contracts and found little empirical evidence on the influence of risk preferences of contracting agents on contract choice, a fundamental premise of classical contracting theory. Departing from the existing literature, this paper develops a choice experiment to study public transport operators’ preferences for different contractual forms. People involved in the public transport industry across Australia are invited to do the survey but the respondents are mainly bus operators in New South Wales. The respondents are offered two hypothetical contracts with different risk profiles and incentives and asked to indicate their preferences as well as their acceptance to provide the services under the contract they prefer. A non-linear scaled multinomial logit model is estimated to establish the role of risk allocation on contract preference of bus operators and the optimal amount of risks and incentives, conditioned on the operators’ attitude towards risk. The results help authorities design performance-based contracts to obtain their objectives while maintaining the operators’ level of satisfaction.     

Designing a decision support model for the LNG market

Abstract

As the Liquefied Natural Gas (LNG) market is supply-driven and subject to long-term contracts, both liquefaction companies and shipowners need to make strategic decisions on fleet chartering requirements. These planning decisions become ever more difficult in light of the transformations permeating the LNG market, propelling into a more competitive market with more flexible trades and expanding spot markets. The overcapacity of LNG ships during 2008–2009 triggered by massive overcontracting is a good case in point where the use of decision support models would have been beneficial, especially considering the fortunes and risks at stake. In this paper we present an LNG shipping model that effectively supports decision-making in practice. To demonstrate the value added of the model, we study the implications of LNG project delays and increased decommissioning of ships with respect to market balance and fleet requirements.