Ethical Issues in Transport Industry

What are Ethics?? Principles or standards of human conduct that govern behavior of individuals and groups. Doing right thing determines good/evil, right/wrong, just/unjust actions of individuals Branch of philosophy that seeks to address questions about morality.

Business Ethics art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. concentrates on moral standards as they apply particularly to business policies, institutions, and behavior.

Transport Industry- an overview forms the backbone of infrastructures people and businesses rely on an extensive, interrelated network Globally, the logistics industry is valued at US$ 3.5 trillion The Indian logistics industry is presently estimated at US$ 90 billion Generates employment for 45 million people in India

ECONOMIC IMPACT1. Key component of growth and globalization. 2. Largest drainer of energy. 3. Passenger transport essence of tourism. 4. Important business for commerce.

LAWS RELATING TO TRANSPORT INDUSTRY IN INDIAThe law relating to carrying of goods is contained in the following enactments: 1. In case of carriage of goods by land:(i) The Carriers Act, 1865. (ii) The Railways Act, 1989.

2. In case of carriage of goods by sea:(i) The (Indian) Bills of Landing Act, 1856. (ii) The Carriage of Goods by Sea Act, 1925. (iii) The Merchant Shipping Act, 1958. (iv) The Marine Insurance Act, 1963.

3. In the case of carriage of goods by air: The Carriage by Air Act, 1972.

Modes Of Transport Human-powered transport Animal powered transport Aviation Rail transport Road transport Ship transport

Other: Pipeline transport Cable transport Spaceflight

Ethical issues in Transport Industry1. Safety and Security Overloading Drunk driving Theft of goods Illegal activities by emloyees Eg: transport of drugs, smuggled goods, etc Accidents Can be used for terrorists activities

2. Environmental issues Air pollution esp. by vehicles Which also causes: - Global warming - Climate change - Smog, etc. Excessive consumption of fuel Water pollution by ships, etc Traffic congestion Noise pollution Oil slicks shipping industry

3. Documentation issues- Travel logs Manipulations in the travel logs and documents that make room for corruption and unethical activities and transactions. Inefficient transportation services are protected through corruption which leads to barrier to entry of modern operators low quality services High transportation costs inhibits emergence of a seamless supply chains

4. Regulations by government Strict regulations and guidelines Pollution norms Freight weight limitations Minimum wage to employees Maximum working hours Etc. These guidelines are seldom followed in transport industry

5. External management issues Related to market issues Cartels or unions Abuse of dominant position Attempts to monopolize Anti-competitive mergers and acquisitions

Unethical practices in Road transport Inaccurate Travel Logs Unsafe Practices Air and noise pollution Overworked staffs Underpaid Overloaded trucks and buses High prices charged Accidents- esp.- Hit and run cases, drinking and driving cases.

Unethical Practices in Railways

Unethical Practices in Aviation Overbooking. Overworked crew members. Confusing Ticket Pricing Policy. Pay cuts and layoffs during recession Used for terrorist activities- 9/11, kandahar Cartels are very strong

SUGGESTIONS TO INCLUDE ETHICAL BEHAVIOUR IN TRANSPORT INDUSTRY Sufficient, rather than maximum profitability Provision of safe, efficient and comfortable transport services Employment background check Supplier/vendor screening Substance abuse testing Driving records Simplification of pricing policy (esp. in Airlines)

CASE STUDY: Boeings unethical practices In December 2003, the Boeing Company (Boeing's) CEO, Philip Condit resigned amidst widespread criticism against the company's allegedly unethical practices. Though both Boeing and Condit denied that the resignation was a result of ethical lapses in the company, analysts felt otherwise In mid-2003, Boeing was sued by its competitor, Lockheed Martin Co., for possessing proprietary information belonging to Lockheed. Around the same time, Boeing's tanker lease deal with the US Air Force also came under scrutiny.

Earlier the US Air Force had agreed to lease 100 Boeing 767s planes from Boeing. The total cost of the deal was reported to be $19.6 billion. It was alleged that the deal was awarded to Boeing without any competing bids and to make leasing look cheaper than buying them outright (although it actually costed more) Boeing and the US Air Force did some financial jugglery in their calculations of the cost of the planes.

Analysts felt that Boeing managed to pocket the deal by lobbying with top defense officials at the Pentagon. It was also alleged that the deal was meant to bail out Boeing from its current financial crisis. The controversy over the tanker deal resulted in two top executives at Boeing being fired in late November 2003, followed by Condit's resignation. Analysts pointed out that these alleged lapses happened in spite of Boeing having in place a detailed code of ethics. In December 2003, The Economist wrote, "The lesson from Boeing, meanwhile, seems to be that good governance and tough, independent board do not guarantee good corporate behaviour."

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