Analysis of Operational Efficiency Considering Safety Factors as an Undesirable Output for Coastal Ferry Operators in Korea

Abstract

In the maritime transportation services industry, marine accidents may lead to fatalities, injuries, and property losses. Coastal ferry operators experience marine accidents and must pay attention to safety to guarantee the sustainability of their business. This study is aimed at analyzing the operational efficiency of coastal ferry operators in Korea from a safety perspective. We designed two slack-based measure of efficiency (SBM) models. One is a normal SBM, which includes only the total passenger volume as the desirable output. The other is a safety-constrained SBM, which includes marine accident records as an undesirable output with the desirable output of passenger transportation performance. We selected 44 coastal ferry operators in Korea that have been continuously operating for five years (2013-2017) as decision-making units (DMUs) and compared their operational efficiency scores. The results showed that the impact of marine accidents on business is greater in DMUs with lower transportation sales than in those with higher sales. This suggests that, while it is important for the government to strengthen safety regulations, a combination of policies that also help small ferry operators to stay in business in the long term is necessary to reduce marine accidents effectively while improving efficiency.