Ethics Spell Credibility

There's a price to pay for unethical behavior. In China, the price may be your life. Fines, prison, and loss of career are more common. If you watch the headlines, it appears that some can avoid any penalty (or even profit from their mistake).

As a Chinese court handed down a death sentence for a second official of its State Food and Drug Administration convicted of taking bribes, President Bush was signing a clemency order for a convicted top White House aide. Meanwhile, film actors attend anger management courses or take a preemptive step of checking themselves in at a drug and alcohol clinic before their first court appearance for drunk driving.

Cao Wenzhuang, former department director for China's State Food and Drug Administration, received a death sentence for accepting a mere $307,000 in bribes, his former boss was sentenced to death for accepting just over $800,000 in cash and gifts. Cao will likely spend the rest of his life in prison for an amount of money that, for a US executive, would be a back-page story in a local US newspaper.

At times, it seems like the world is in an ethical meltdown. What keeps people honest and ethical though is not a set of regulations or even the threat of death. I once asked Don Schneider about firewalls to prevent his truckload operation from seeing the rates his 3PL group negotiated for its customers. He said that it wasn't technology that kept that from happening; it was values.

That's a nice sentiment from an industry whose past is checkered at best—the National Industrial Transportation League was formed 100 years ago to go head to head with abusive railroads and entire forests have been consumed over the years to publish regulations to forestall unethical practices in transportation.

You can't escape your past. Chatting about the Surface Transportation Board's decision to eliminate motor carrier antitrust immunity brought up some very recent practices that raise ethical questions.

Shippers complained about carriers using the freight classification system to extract a higher price for shipments. "If they don't like the rate you have, they move your freight to a higher classification." But the ethical sword cut both ways. Carrier sales reps at risk of losing a sale would advise shippers to enter a lower classification. "The pricing department has so much coming in, they'll never notice. If they do, you just end up paying your regular rate."

There's certainly far more money at stake than the $1 million in bribes the two Chinese officials accepted, and the only penalty for the perpetrators in this case seems to be their credibility.

How far can you trust a carrier that abuses its pricing system? What does your future relationship look like with a shipper who is willing to be a party to rate fraud? And which of your suppliers are holding you up for excess freight charges?

We need to be sure that as logistics professionals we are doing business with a firm handshake, not a wink and a nod.

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