Efficiency of trucks in logistics: technical efficiency and scale efficiency

Abstract

Purpose

The purpose of this paper is to propose a scheme to estimate the technical efficiency of trucks engaged in logistics and to analyze the properties of efficiency. The objectives are to determine individual‐truck level technical efficiency using both radial and non‐radial measures for freight trucks, to calculate the degree of input overuse.

Design/methodology/approach

Data envelopment analysis is employed in this paper because it does not require the assumption of the functional specification between input and output factors and also includes multiple outputs unlike stochastic frontier model. Data for empirical analysis in this paper come from a survey of truck drivers.

Findings

The result of technical efficiency estimation shows that there exists a substantial opportunity for improvement in technical efficiency of trucks engaged in logistics and also the heterogeneity in the technical efficiency among trucks based on their capacity and age. For scale efficiency, it is also possible to confirm the existence of improvement opportunity and heterogeneity among truck and that trucks with large capacity are more scale‐efficient than those with small capacity.

Originality/value

The paper analyzes the properties of technical efficiency scores of trucks engaged in logistics and finds some managerial insights which can help them improve their efficiency.

Citation

Kim, T. (2010), "Efficiency of trucks in logistics: technical efficiency and scale efficiency", Asian Journal on Quality, Vol. 11 No. 1, pp. 89-96. https://doi.org/10.1108/15982681011051859