An analysis of technical efficiency and service effectiveness for freight railways in African and European countries

For the past decades, technical efficiency and service effectiveness have become topical as performance measures in various sectors. However, a comparison of technical efficiency and service effectiveness for freight rail transport has received less attention in African and European countries. To address this challenge the current study seeks to analyse technical efficiency and service effectiveness of rail freight in African and European countries. Due to data unavailability in other countries, this study selected four African countries (South Africa, Morocco, Democratic Republic of Congo and Algeria) and four European countries (Lithuania, Austria, France and Germany). The data has been collected from the World Bank, International Union of Railway Statistics and Knoema for the period 2017. Input oriented and output oriented data envelope analysis (DEA) were used to analyze technical efficiency and service effectiveness, respectively. The application of DEA requires the selection of appropriate inputs, production and output variables. This study selected a number of employees and length of rail lines as input variables, gross train tonne kilometres (km) as production variable, tonnes carried and tonne kilometres (km) as output variables. The result shows that five out of eight countries were technical efficient and their services effective with values equal to 1.00. The Pearson correlation coefficient was used to analyse the relationship between technical efficiency and service effectiveness. The results indicate that there is a statistically significant positive correlation between technical efficiency and service effectiveness. To determine the impact exogenous variables on technical efficiency and service effectiveness, a Tobit regression analysis was conducted. The results show that technical efficiency and service effectiveness are not significantly affected by exogenous variables. On the other hand, technical efficiency is significantly affected by the number of employees while service effectiveness is significantly affected by gross train tonne km. This study recommends the use of less labour intensive assets and monitoring of gross train tonne km should be viewed as important strategies to improve technical efficiency and service effectiveness, respectively.Thesis (MCom) -- Faculty of Management and Commerce, 202