The Impact of Ferry Disasters on Operational Efficiency of the South Korean Coastal Ferry Industry: A DEA-Window Analysis

Abstract

As the South Korean coastline features an abundance of islands, an efficient coastal ferry industry is vital to maritime transportation in the area. However, ferry disasters can have a severe effect on the operational efficiency of the industry. Thus, the objective of this study is to garner insights into the operational efficiency of the South Korean coastal ferry industry before and after the sinking of MV Sewol off the coast of South Korea. Data envelopment analysis (DEA)-window analysis and slacks-based measure (SBM)-DEA were applied to analyze time-series data from 2007 to 2016. The results illustrate that the total efficiency of the industry according to Regional Offices of Oceans and Fisheries (ROOFs) in each province of South Korea decreased. In particular, the operational efficiency of coastal ferries in Incheon, Jeju, Mokpo, and Pohang decreased considerably, and Busan was the most inefficient in 2016. These findings can enable ferry companies and government authorities to understand the impact of ferry disasters on the operational efficiency of coastal ferries and assist in developing appropriate strategies to improve the performance of the South Korean coastal ferry industry.