ABSTRACT
Ports provide services as opposed to producing physical products; that is, ports provide services for the cargo, vessels and vehicles received. The port operator is the primary provider of port services. A port is cost efficient when it incurs the least in the provision of a given amount of port service. If a port is in competition with other ports, the port will be under pressure to allocate port resources in a technically and cost efficient manner. In order for a port to be cost efficient, it must be technically efficient; that is, port technical efficiency is a necessary condition for port cost efficiency to occur. When port long-run constant unit cost exists, a percentage increase port cargo service results in the same percentage increase in port cost. Port cargo service operating options are measures of the quality of the cargo services provided by a port.
