Title: The impact of capacity on firm performance: a study of the liner shipping industry

Authors: Venus Y.H. Lun, Peter Marlow

Addresses: Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, 11 Yuk Choi Road, Hung Hom, kowloon, Hong Kong. ' Logistics and Operations Management Section, Cardiff Business School, Cardiff University, CF10 3EU, UK

Abstract: In liner shipping operations, shipping capacity and firm performance are associated closely. This study aims to evaluate the effect of scale operations by conducting a data envelopment analysis (DEA) using empirical data. The DEA model of this study consists of two input variables (i.e., shipping capacity and operating cost) and two output variables (profit and revenue). Based on the empirical data collected in 2008, K Line and RCL are found to be efficient firms in the liner shipping industry. The results suggest that non-mega operators, with market share of 5% or below, can operate their firms efficiently.

Keywords: firm capacity; firm performance; liner shipping; container shipping; empirical research; shipping capacity; data envelopment analysis; DEA; operating cost; profit; revenue; operating efficiency.

DOI: 10.1504/IJSTL.2011.037819

International Journal of Shipping and Transport Logistics, 2011 Vol.3 No.1, pp.57 - 71

Published online: 21 Feb 2015 *