In the marine passenger transportation service, one accident may lead to massive casualty and property losses at once. Safety is a key performance indicator for the sustainable management of the marine passenger transportation business. Therefore, the measurement of operational efficiency in consideration of safety performance is important in marine passenger transportation. With this background, this study aims at analyzing the operational efficiency of the passenger vessel operators in the careful consideration of both transport performance and safety management performance. For this purpose, the non-parametric DEA approach is selected as the primary method of the research. As the marine passenger transportation business have various service characteristics and types in Korea, this study focused on a regular coastal passenger transportation service.
In this paper, two types of hybrid measure of efficiency models (hereafter referred to as 'Hybrid Model.'), in which the radial and non-radial measure approaches were simultaneously introduced into the DEA mathematical program, were built to compare the influence of safety management performance with non-radial characteristics on operational efficiency. One is a normal hybrid model that includes only total passenger volume as the desirable output. The other is a hybrid model containing the undesirable outputs related to the ship's safety management. The undesirable outputs indicate the results from safety management performance of passenger vessel operators that are measured with detention and marine accident records caused by human errors or technical faults. The input variables selected for use in the operational efficiency measurements were the number of ships operated, the number of available service frequencies, and the maximum capacity of the allowable number of passengers onboard the vessel.
This study selected 49 Korean firms that have continuously managed regular coastal passenger transportation service from 2015 to 2018 as decision-making units (DMUs) and compared their operational efficiency scores. Below is the summary of the three findings derived from the results of operational efficiency measurement:
First, the efficiency scores tended to be higher in the hybrid model with undesirable outputs than the normal hybrid model. It provided the balanced transport performance of DMUs in terms of service quality rather than lean toward economical transport efficiency.
Second, DMUs with higher efficiency scores in the normal hybrid model also scored higher in the hybrid model with undesirable outputs. Companies with high economical transport efficiency were less affected by changes in the production process constrained by the undesirable outputs than those that did not.
Lastly, under the production frontier constrained by the undesirable outputs, the operational efficiency score changed significantly in companies with relatively lower passenger transport sales volume than those with more outstanding passenger transportation sales. The opportunity cost from safety management performance was estimated to be higher in companies with relatively lower passenger transport sales volume than those with a higher sale. The results showed that the impact of safety management on business was more significant in small business companies with lower transportation sales.
Results above have implications for the direction of coastal passenger ship safety policies pursued by the government. It suggests that securing stable economic backbone of companies could also positively enhance corporate investment in safety management. It should be recognized that passenger ship operators may prioritize pursuing profits through commercial ship operations rather than through careful safety management. Therefore, while the government needs to strengthen safety regulations, a combination of policies that also helps small business companies to stay in business in the long term is necessary to reduce marine accidents effectively while improving operational efficiency.
This study is significant in that it not only analyzed the efficiency of passenger vessel operators more accurately by using the hybrid measure of efficiency model but also considered safety management performance records for overall efficiency evaluation from a sustainable management perspective.