Examination of port performance in a developing economy: A case study of Libyan ports
Creators: name: Elferjani, Ismail
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350701
subject: Corporate governance
classificationCode: 350903
subject: Logistics
classificationCode: 350999
subject: Transportation, logistics and supply chains not elsewhere classified

description: Efficient ports are essential for efficient national, regional and international logistics and business more generally. However, efficient port performance depends on a number of factors, including adequate and efficient facilities and technology for cargo handling, accessibility and connectivity (both seaside and landside), port location in relation to trade routes and hinterland, skills and labour, as well as appropriate managerial technologies. While some of these factors may be in the control of port management, others may be beyond their immediate control.<br><br>This study focuses on port performance in developing economies, with specific reference to Libya. Libyan ports occupy a strategic location close to the Asia-Europe international trade route, and between Africa and Europe. Therefore, they have the potential to play an important role in regional economies, acting as critical nodes in international logistics and supply chains. However, the persistently poor performance of ports across the country undermines this potential. Poor performance at the ports has, for example, pushed big carriers to bypass Libyan ports for the ports of neighbouring countries. Additionally, many traders in the region transport cargo through ports other than Libya’s.<br><br>This study was developed to examine the factors that undermine the performance of Libya’s ports, using the perspective of Libyan port stakeholders. It examines how the various factors interact to create a situation of poor performance. To achieve this, the study was developed in two phases. The first phase used an online questionnaire that included factors related to port performance extracted from the literature. The data obtained from this questionnaire were analysed using descriptive analysis and one-way analysis of variance (one-way ANOVA). The second phase was used confirm the findings of the first phase, using data envelopment analysis (DEA). Secondary data related to 25 ports, including seven Libyan ports, were used for this purpose.<br><br>The study finds that the poor performance of Libyan ports is caused by poor port infrastructure, superstructure and land transport infrastructure. However, a deeper analysis shows that the problem is much bigger than just port precinct-related limitations. The study has also found that external factors play a major role in this situation, including political, economic and social factors. It suggests that a prevailing environment of bad politics and poor economic governance and management systems are responsible for the performance limitations at the ports. Apart from the internal political turmoil that has characterised Libya over many years, Libya has also been involved in many major conflicts with surrounding countries, a fact that undermines the position of its ports to facilitate trade in the wider regional hinterland. Internal political instability has also created a bureaucracy characterised by corruption, political patronage, ineptitude and general economic mismanagement. Thus, Libya has failed to adopt an effective local framework to drive effective investment and proper management of the ports and ensure efficient performance.<br><br>It is envisaged that the findings of this study will be useful in the formulation and implementation of appropriate policy, both within the ports and more broadly, to achieve enhanced operational efficiency. While there are important questions for port and terminal operators regarding internal operations efficiency, there are even bigger ones for government regarding establishing an enabling economic environment for investors and operators in the industry.