Technological drivers of dry port efficiency in Brazil.
| Autor | Rodrigues, Antonio Carlos |
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Introduction
Intensified competition has placed increased responsibilities on infrastructures, which systemically impact companies and their supply networks, requiring continuous improvements in transportation and customs systems (Khaslavskaya & Roso, 2020; Miraj, Berawi, Zagloel, Sari, & Saro i, 2020). In the case of international trade, specifically, customs agility and decreasing bureaucracy play a decisive role in stimulating trade between countries, especially emerging economies--such as Brazil, Russia, China, India and South Africa (Abdoulkarim, Fatouma, & Hassane, 2019; Chang, Yang, Wan, & Han, 2019; Korovyakovsky & Panova, 2011; Li, Dong & Sun, 2015; Ng, Padilha, & Pallis, 2013).
In this context, dry ports play a strategic role by promoting better product distribution performance and using available transportation modes (Jeevan, Chen, & Cahoon, 2017;
Khaslavskaya & Roso, 2020). In Brazil, additionally, the management of dry ports is directly influenced by regulatory instruments and competition with seaports in the provision of services (Moshtari, 2016; Ng et al., 2013; Padilha & Ng, 2012). Furthermore, with the increasing globalization of business activities and the continuous flow of goods in supply chains, all port activities are driven to efficiently perform (Yang, Taudes, & Dong, 2015). Thus, efficiency has decisive participation in the performance of business operations (Chang et al., 2019; Khaslavskaya & Roso, 2020).
One technique to measure efficiency is the Data Envelopment Analysis--DEA (Cooper, Seiford, & Zhu, 2011), which measures unit efficiency, groups units into clusters with similar interests, and designates the top-performing units to identify the efficiency and productivity improvement path. Its main feature is the ability to simultaneously process multiple inputs and outputs, assisting managers in decision-making. The nonparametric model has been widely applied in dry ports efficiency research (Abdoulkarim et al., 2019; Haralambides & Gujar, 2012; Markovits-Somogyi, Gecse, & Bokor, 2011; Yang et al, 2015).
Thus, this study seeks to contribute by extending previous studies on dry ports' competitive situation, strengths and weaknesses (Chang et al, 2019; Khaslavskaya & Roso, 2020), with methodological refinements. Furthermore, the study aims to identify dry ports' technological drivers of scale efficiency (SE). Therefore, after calculating efficiency with DEA technique, Bootstrap Truncated Regression (BTR) was applied to measure contextual variables' impact on the industry's SE.
This paper contributes to the advancement of the field of study in four ways: first, the study demonstrates that coordination processes and Information Technologies (ITs) in Brazilian dry ports can promote a more rational allocation of resources and, consequently, lead to an operation closer to the most productive scale. Second, the study empirically demonstrates that most dry ports operate below their technical and operational capacity, in line with ABEPRA (2015) and Padilha and Ng (2012). Third, it also contributes to reducing the scarcity of dry port efficiency studies by the two-stage approach, called out by Chang et al (2019). Finally, it is possible to use the methodology as a benchmarking tool for developing best practices in the industry.
The remainder of the paper is divided into six sections. Section 2 discusses dry ports in the Brazilian context, ITs that can be adopted and previous studies that have applied DEA to the dry port sector in other countries. In section 3, two-stage DEA modeling is presented in more detail. In section 4, the data are analyzed and the results are discussed. Finally, section 5 presents conclusions, managerial implications and future research recommendations.
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Literature review
2.1 Dry ports and the Brazilian context
Dry ports play a significant role in importing and distributing commodities and import-export trade. However, in Brazil, dry ports focus more on the product movement for international trade (Ng & Liu, 2014; Ng et al., 2013). The dry port emerged as a terminal for the hinterland and changed over time due to the growth of container use, the expansion of terminals, and the diversification of port functions (Khaslavskaya & Roso, 2020; Miraj et al., 2020).
To meet the criteria of a dry port, a terminal facility must satisfy three parameters (Khaslavskaya & Roso, 2020; Miraj et al., 2020): 1) be an extension of a seaport on land; 2) be an inland extension of a seaport and 3) have a connection to a seaport via "large-capacity transport," which often implies rail transport. However, the last item is not typical for many dry ports worldwide, such as Brazil (Ng & Tongzon, 2010) and China (Chang et al., 2019).
Dry port definitions are still relatively vague, and various terminologies appear in the literature (Khaslavskaya & Roso, 2020; Miraj et al., 2020). Thus, there is still no definitive consensus on which term or definition to use for facilities of this nature (Rodrigue, Debrie, Fremont, & Gouvernal, 2010). For example, a freight village was first introduced in the 1990s as an integrated logistics center without a close relationship to port or container terminals (Yang et al, 2015). In the 2000s, researchers widely used the terminology of ports or land transport terminals for further study (Miraj et al., 2020; Rodrigue & Notteboom, 2009). Other definitions can be found in Witte, Wiegmans, and Ng (2019). Rodrigue et al (2010) developed the term "inland port", which is widely used in the United States. However, the international literature has adopted the term "dry port" as an inland port that connects goods on the mainland to coastal areas (Miraj et al., 2020).
In Brazil, dry ports were introduced in the 1970s by Decree-Law 1,455, which authorized the implementation of customs clearance in secondary areas. The National Privatization Program created by Law 8,031/90 allowed privatization. Since then, dry ports have faced two challenges: (1) competition with ports and (2) lack of a transparent institutional system to regulate the sector (Ng & Liu, 2014; Santos, 2019). Regarding the first challenge, the legislation for port reform represented an institutional change in port competition due to new rules to regulate seaports. The Port Modernization Law 8,630 affected the development of dry ports after 1993 since seaport (and terminal) operators began to compete for business (Santos, 2019). In order to remain competitive, dry ports needed to be more efficient and provide more sophisticated services and were forced to diversify their activities and offer higher value-added services to shippers (Ng & Liu, 2014; Ng et al., 2013). Unfortunately, many dry ports have not been able to face these challenges and have even closed down their activities, such as the dry port of Piracicaba, in Sao Paulo (Padilha & Ng, 2012).
Regarding the second challenge, dry ports also face considerable uncertainties due to the absence of an adequate legal framework. Until 1995, dry ports were established through a simple authorization process by the Federal Revenue Service. The term dry port was only adopted in 2002 by Decree 4,543, art. 724. In the same year, the use of dry ports for industrial operations was introduced by Normative Instruction 241/02, which waived some taxes for products assembled or produced in dry ports for export. Three attempts to change the current dry ports paradigm have occurred, namely: Provisional Measure (PM) 320/2006 (rejected), Senate Bill 327/2006 (shelved) and PM 612/2013 (validity ended) (Ng et al., 2013). PM 320 was introduced in 2006 to resolve legal disputes involving dry port operators. The purpose was to end the public bidding requirement and allow dry ports to operate through licenses issued by the Federal Revenue Service. This measure also expanded the scope of dry ports--called the Logistics and Industrial Customs Center (CLIA, in the Portuguese acronym) (Santos, 2019). However, this new measure was considered unconstitutional and rejected by the Brazilian Senate (Santos, 2016). The Draft Bill 327/2006, a substitute for PM 320, lost strength during its run through the Senate, maintaining the requirement for bidding to operate dry ports. After Draft Bill 327/2006 was shelved, PM 612/2013 came into force. During its validity, only requests for dry port conversions into CLIAs were approved. Requests for the installation of new centers were not analyzed. With the expiration of PM 612/2013, request evaluations were suspended, pending legal analysis of the effects resulting from its ineffectiveness.
2.2 Dry port efficiency studies
Research on dry ports conducted using the DEA technique is at its early stage, as shown in Table 1. For review, systematic procedures were followed to ensure the quality of the base used in this study (Thome, Scavarda, & Scavarda, 2016). Articles published on dry port efficiency (from 2000 to 2020) in the three major indexed journal catalogs--Web of Science, Scopus and Dimensions (Singh, Singh, Karmakar, Leta, & Mayr, 2021)--were selected. After removing duplicate articles, 169 unique documents were in the queried databases. We have identified five articles published in journals with DEA evaluation models in dry ports.
The limited number of studies that use DEA in dry ports present a lack of standard models and variables; thus, we understand that there is no single set of efficiency measurements for this type of operation. Furthermore, only one study applied the DEA methodology and identified contextual variables that significantly impact efficiency. Therefore, we propose to analyze Brazilian dry port operators using a two-stage DEA model. Although it introduces...
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