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Volume 28, Number 6November/December 1977

In This Issue

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The Yugoslav Connection

Strain Lukovic of Yugoslavia waved his huge fist in the air to emphasize the point. "If the Bulgarians do it in 15 days," he said, "we do it in 10."

Competition? In the Communist bloc? Indeed there is. Along with such other capitalist practices as bonuses, pay incentives and price cutting - all part of an intensive effort by east European countries to earn much-needed hard currency.

So far the effort has been astonishingly successful. Huge state-owned trucking combines already field more than half of all the 6,000 trucks assigned more or less regularly to the Middle East run. As a result, some western European companies have begun to complain about what they see as unfair competition.

That, however, is not the way Strain Lukovic sees it. A large Serbian with graying wavy hair, Lukovic, is acting general director of Transped, Yugoslavia's biggest trucking fleet. He says that Transped's success on the Middle East route is due to Yugoslavia's good relations with the Arab world and to its system of employee incentives.

"As a non-aligned country, Yugoslavia has very good relations with non-aligned countries in the Middle East," says Lukovic. "Yugoslav building firms are doing a lot of work in Iraq, Kuwait and the Emirates. Transportation follows naturally."

"And our drivers," he goes on, "are not paid monthly, they are paid by results. They get a percentage of the profits. The more they earn for the company, the more they earn for themselves."

If Transped truckers work hard, says Lukovic, they can earn up to $800 a month - two and a half times the average Yugoslav salary.

And they do work hard. Drivers travel in pairs. One drives while the other sleeps, so the truck never has to stop. And as maintenance crews and administrative staff also share in the bonus scheme, they insure rapid truck turn-around and tight schedules. "It is very important to the exporter," says Lukovic, "that his goods arrive on time."

At the beginning of the 1970s, Transped was a relatively small domestic concern transporting about 100,000 tons of goods annually. Today, as a result of its aggressive policies, its 250 gun-metal blue articulated rigs and its silver refrigerated trucks carry nearly 800,000 tons of goods a year from Europe to Africa and Asia. Between 70 and 100 of its vehicles are permanently employed on the Middle East run.

Transped, furthermore, has twice won Yugoslavia's coveted "May First Prize," an industrial honor for rapid development, exceptional business results and considerable foreign-currency savings. Last year the company earned nearly $9 million in foreign exchange.

When Lukovic, 47, joined the company as a junior executive in 1956, Transped had only 400 employees. Today, it has 1,800, a growth that Lukovic atrributes to the Middle East trucking boom.

"There has been a tremendous increase in Middle East business in the past five years," says Lukovic. "And we expect it to continue on at least the same level for five years to come." He also expects that Transped will have a good share of that business. To cope with the increased tonnage, Transped is planning a joint trucking venture with Iraq and by 1980 hopes to be handling about l.7 million tons of cargo a year and earning over $10 million in hard currency annually.

Transped, moreover, is just one of the east European trucking combines that are thinking big. In Austria, recently, some small trucking firms were approached by middlemen with takeover offers. The owners thought the offers came from a large conglomerate - but as it turned out, the "conglomerate" was actually Hungary.

This article appeared on pages 22-23 of the November/December 1977 print edition of Saudi Aramco World.


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