Evaluating and Managing Tramp Shipping Lines Performances: A New Methodology Combining Balanced Scorecard and Network DEA

Abstract

The shipping industry is essential for the economic development of nations like Taiwan as a means delivering and receiving cargo. Shipping has been depressed since 2008 as a result of the financial crisis increasing pressure for the shipping lines to operate more efficiently. This paper aims to contribute to the existing literature by proposing a novel model to identify and understand paths to improve shipping services by integrating network Data Envelopment Analysis (DEA) and the Balanced Scorecard (BSC). The proposed model treats the four perspectives of BSC (financial, customer, internal business processes, and learning and growth) as four interconnected stages and calculates overall efficiency of each shipping company as well as the individual efficiency of BSC each stage. We present proposed model to advance the analysis of the shipping industry and to suggest an approach that benefits from DEA and BSC. Applying our proposed model to a limited sample of shipping line data, our test results show the ranking and the differences in performance between peer-evaluation and self-evaluation of each company and provide examples of potential insights into specific operations where modification can improve shipping line performance. Our results suggest applied to a complete set of operating data has the potential to assist shipping companies improve operations and focus efforts and investments on areas that have potential to generate improved performance.

Keywords::

• Network Data Envelopment Analysis
• Balanced Scorecard
• Shipping line
• Performance evaluation
• Centralized approach
• Cross-efficiency

Acknowledgement

The authors are grateful to anonymous reviewers for their suggestions and comments. This research is partially supported by the Ministry of Science and Technology under grand NSC-102-2410-H-019-015-MY2.