A cure for "Corporate Alzheimer's"

By William J. Augello -- Logistics Management, 4/1/1999

Have you ever tried to find an employee or officer in your company who remembers what happened or who was responsible for some major event that occurred 20, 30, 40, or 50 years ago? It's nearly impossible these days--a phenomenon that has been referred to as a lack of "corporate memory" or "institutional memory." In the medical field, it might be known as "Corporate Alzheimer's Disease."

Early retirements, downsizing, and outsourcing are major contributors to the loss of corporate memory. Is there anyone left in your corporation who remembers shipping under filed tariffs, "public convenience and necessity" hearings for Interstate Commerce Commission (ICC) operating authority, recovering freight claims for the "full actual loss" under the Carmack Amendment, common carriers' duty to serve the public, or Elkins Act violations?

Why should we need to preserve such information? For one thing, it enables shippers to appreciate the improvements that have been achieved in recent years. The freedom we have today to enter into contracts and to negotiate rates and classification ratings should not be taken for granted.

Another reason is that it helps shippers to identify problems caused by deregulation so that they can adopt remedial measures. For example, shippers' decisions regarding full-value vs. "released" or "declared-value" rates once were made under the watchful eye of the ICC, which assured that the differentials between the two types of rates were reasonable. Today, however, no one is monitoring carriers' liability limits, nor is any federal agency monitoring "third-party logistics providers" or other intermediaries for compliance with statutory registration and insurance requirements. Shippers, therefore, are on their own, and a solid knowledge of past practices will help them protect their interests in today's deregulated environment.

The Transportation Consumer Protection Council (TCPC) last year took steps to address the problem of the loss of corporate memory through its participation in two projects that could benefit the entire transportation community. The first was the creation of the National Freight Transportation Library, which TCPC helped to establish and continues to support. The library is preserving freight-transportation history by memorializing the industry's pioneers and leaders. It also is establishing a centralized online research facility for transportation-related information.

The other step was the TCPC's publication of a manual titled Corporate Procedures for Shipping and Receiving, a procedural guide that every shipper and receiver should incorporate into its business practices. This book is intended to serve as a guard against the loss of expertise due to the retirement and downsizing of employees who lived through the trials and tribulations first of heavy government regulation, and then of deregulation.

The bottom line is that shippers need to remember events of the past, such as the "undercharge" embarrassment, to prevent them from reoccurring and to improve the contracts and bills of lading under which the nation's freight will move in the future. Institutions like the National Freight Transportation Library and internal information sources like corporate procedures manuals can help fill this growing information gap.

William J. Augello Esq. has practiced transportation law for 46 years. He also is the executive director of the Transportation Consumer Protection Council, an organization that is devoted to protecting shippers and receivers in transportation matters, such as freight loss and damage, undercharges, and contracts. He can be reached at (520) 531-0203 or via e-mail at augello@transportlaw.com.