In liner shipping operations, shipping capacity and firm performance are associated closely. This study aims to evaluate the effect of scale operations by conducting a data envelopment analysis (DEA) using empirical data. The DEA model of this study consists of two input variables (i.e., shipping capacity and operating cost) and two output variables (profit and revenue). Based on the empirical data collected in 2008, K Line and RCL are found to be efficient firms in the liner shipping industry. The results suggest that non-mega operators, with market share of 5% or below, can operate their firms efficiently.
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Lun et al. (2010) studied this question.
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