# **1 Introduction**

The port sector has probably not received the attention it deserves from economists. In spite of this, there is a long history of highly specialized research on the sector, which has increased over time the coverage of the analysis. Economic studies of the sector date from the 1960’s and focus on aspects such as pricing port facilities, port capacity and investment policies (Goss, 1967 and Heggie, 1974). During the following decades, the first manuals on port economics appeared (Peston and Rees, 1971, Bennathan and Walters, 1979, Jansson and Shnneerson, 1982). At about the same time the literature on ports broadened and started to deal with different aspects of the port industry: infrastructure, productivity and determining factors, investment and planning, costs and economies of scale, privatization of ports, promotion of port competition, port selection criteria, etc. The literature on efficiency and productivity of the port industry may be the latest topic of interest among the specialists since the second half of the 1990s. It is relatively new and modest, particularly if we compare it with similar studies carried out for other public services (electricity, water, banking, health, education, agriculture, etc.), including other transport modes.

One of the reasons for the most recent developments is the fact that ports consist of an interesting research case with many structural changes, both technical and policy, which have transformed the business. In recent decades maritime transport has indeed undergone important transformations with the increase of ship size and the development of containerized cargo transport. These changes forced ports to grow accordingly to meet the new needs arising from the larger number of containers handled by ships. However, not all ports have been able to increase both their mooring and storage capacity. Consequently, a substantial improvement of port operations efficiency has been required for a large number of ports. These concerns have emerged in Spain and has in many other countries, justifying a wave of reforms during the 1990s.

The main purpose of this paper is to quantify the evolution of technical efficiency in port infrastructure service provision in the major Spanish ports involved in container traffic. The analysis focuses on container traffic for the following reasons. First, container traffic promotes the integration of different transport modes. Containers are not a type of merchandise but a way of packing goods. They are boxes of a standard size which facilitates loading and unloading them as well as carrying them to other transport modes. The second reason is that the use of containers is still booming. If in Spain during 19922002, the accumulated growth rate of non-containerized merchandise was 3.5% p.a., containers grew 11.2% p.a. The third reason lies with the fact that container handling requires specific infrastructure (area, mechanical devices, etc.) for which a large amount of public funds is devoted every year: in 2002, 64% of total investment in Spanish ports was devoted to finance infrastructure works (60% of the investments in infrastructure were carried out in the ports analyzed in this paper). Finally, it is a generalized opinion among researchers that the development of containers also carries a substantial improvement to port efficiency. For instance, Kim and Sachis (1986) show that 85% of the increase in total factor productivity of Ashod Port (Israel, 1966-1983) is driven by containerization.

The second objective of the paper is to analyze the impact of port reforms carried out in the 1990’s. The first and most important one took place at the end of 1992. It was characterized by the development of new management procedures and organization 2