The Dream of Large-Scale Truck Transport Enterprises — Outsourcing Experiments in the German Democratic Republic,1957–80

Under state socialist economic policy, the concept of large-scale factories played an important role. The assumption was that large productivity gains would result from large-scale organisation and so large-scale concepts were also applied to the transport sector. Thirty years before Western management started outsourcing truck transportation from their factories, from 1957 state socialist traffic policy in the German Democratic Republic pulled truck fleets out of nationally owned enterprises, concentrating them into large and dedicated transport service enterprises. As this policy did not increase productivity, it was partly revised in the 1960s. The centralisation policy was unsuccessful because state-owned enterprises struggled against the state socialist transport department to keep the fleets they needed to conduct business. Conflicts between the state socialist ideology of centralisation and the operational needs of transportation within commerce, construction and industry took on many forms. For example the enterprises transferred only old trucks to the service companies. The paper shows that the theorem of the ‘economies of scale’ that was derived in the process industries does not apply in the transportation trade.