How efficient are malaysian shipping companies: a stochastic frontier approach with malmquist productivity Indices

Abstract

The purpose of this paper is to analyse the performance of the Malaysian Shipping Companies. The company’s performance indicators such as technical efficiency and total factor productivity (TFP) have been measured using the stochastic frontier approach and subsequent Malmquist index. A secondary data for selected shipping and transportation service provider’s annual reports for the past five years were analysed using Frontier 4.1 and Data Envelopment Analysis Program (DEAP)software. It was found that 80% of the shipping companies were operating below the frontier line (<1.0). The findings are expected to contribute significantly to the business progress and performance metrics of Malaysian companies and also help to benchmark the shipping industry’s best practices.