# **6. Benchmarking the Efficiency of OECS Ports against Latin America**

**“Technical efficiency” is a measure of how well a port translates a set of inputs into an output, compared with what is optimal** (“the frontier”). This type of analysis<sup>20</sup> is particularly useful because it quantifies port performance while permitting a comparison of this performance across regions and subregions and over time. The result is a comprehensive assessment of port performance in Latin America and the Caribbean (LAC) and in the OECS. Annex 1 describes how technical efficiency is computed.

## **South America has the best-performing ports in Latin America in terms of technical efficiency, while**

**the OECS ports are among the worst performers.** In Latin America as a whole, technical efficiency averaged 49 percent of the optimal frontier between 1999 and 2010. South America performed best, with 52 percent technical efficiency, followed by Central America (50 percent) and the Caribbean (44 percent).<sup>21</sup> As a group, the eight OECS ports included in the sample performed worse than those in the Caribbean and South and Central America, with an average technical efficiency of 43 percent over these years. South America led the way with 11 ports in the top quintile of technical efficiency, followed by Central America with 6 and the Caribbean with 2. The OECS did not have any ports in the top quintile (table 6.1).

**Technical efficiency improved slightly in LAC between 1999 and 2010, but the performance of the OECS ports declined.** The average technical efficiency of the LAC ports rose from 46 percent in 1999 to 50 percent in 2010. While the OECS ports outperformed their Caribbean counterparts on throughput growth in recent years, the OECS ports performed slightly worse than the rest of the Caribbean and worse than the other LAC subregions in recent years in terms of technical efficiency. But the sparseness of the OECS data at the beginning of this period makes any analysis of trends in technical efficiency between 1999 and 2010 difficult.

**The best-performing port during this period was Manzanillo in Mexico, with an average technical efficiency of 83 percent** (table 6.1). In 2010 Manzanillo’s throughput was 1,509,378 TEUs, and the port had 8 gantry cranes and no mobile or quay cranes. The worst-performing port during the period was Santarem in Brazil.

**The performance of individual OECS ports was various but generally poor.** Two OECS ports — Castries (St. Lucia) and St. John’s (Antigua and Barbuda)—appear in the third quintile with technical efficiencies of 56 percent and 54 percent, respectively. Roseau (Dominica), Vieux Fort (St. Lucia), and Campden Park/Kingstown (St. Vincent and the Grenadines) appear in the second quintile, with scores of 48 percent, 41 percent, and 35 percent, respectively. St. George’s (Grenada), Basseterre, and Long Point (St. Kitts and Nevis) fall into the first quintile with technical efficiencies of only 18 percent, 8 percent, and 3 percent, respectively. Notably, the three worst performers in the OECS lack a mobile or quay crane, which all of their OECS counterparts (except Roseau) have.

**The technical efficiency of the OECS ports also varied in the 1999 to 2010 period, with very poor performance in 2002 and 2003 and again in 2007** (figure 6.2). This variability is due, in part, to the lack

> 20 The benchmarking of port efficiency included in this section is an extension of Sarriera and others (2013) to include the Organization of Eastern Caribbean States (OECS) ports. The revised estimates are also based on an expanded data set to add a year of throughput data for all countries, and to revise throughput figures as final rather than preliminary estimates for previous years.

> 21 Results reported are based on the second specification of the model as in annex 1(c).

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