The Impact of the Sewol Ferry Tragedy on the Coastal Ferry Industry Efficiency: A Case of South Korea

Abstract

Whereas an abundance of islands dominates the coastline of South Korea, the area’s maritime transportation has its success depend on an efficient coastal ferry industry. Indeed, ferry disaster pose severe impacts on an industry’s operational efficiency. In this study, the main aim was to gain insight into the coastal ferry industry of South Korea, especially regarding its operational efficiency. The study strived to gain insights into this parameter by investigating the situation before and after MV Sewol sank off the South Korean coast. To analyze time-series from 2007 to 2016, the study employed slacks-based measure (SBM)-DEA and data envelopment analysis (DEA). From the findings, the study established that based on the Regional Office of Oceans and Fisheries (ROOFs), the industry’s total efficiency in South Korea’s respective provinces decreased. Indeed, considerable decline was noted in Pohang, Mokpo, Jeju, and Incheon. In 016, the most inefficient region was Busan. The implication for government authorities and companies is that the study increased the understanding about the extent to which ferry disasters could affect industry operational efficiency. In future, it becomes essential for the affected countries and companies to establish relevant strategies through which the coastal ferry industry could be improved, with South Korea unexceptional.