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                                                                   Exhibit 10.36

                          VELOCITY EXPRESS CORPORATION
                       CODE OF BUSINESS CONDUCT AND ETHICS

        Velocity Express Corporation (the "Company") is committed to the highest
standards of legal and ethical business conduct. The Company's employees should
always act lawfully, ethically, and in the best interests of the Company and its
shareholders. This Code of Business Conduct and Ethics (the "Code of Conduct")
summarizes the legal, ethical and regulatory standards that Velocity Express
Corporation must follow and is a reminder to our directors, officers and
employees, of the seriousness of that commitment. Compliance with this Code of
Conduct is mandatory for every director, officer and employee of the Company.

                                  INTRODUCTION

        Our business is becoming increasingly complex, both in terms of the
geographies in which we function and the laws with which we must comply. To help
our directors, officers and employees understand what is expected of them and to
carry out their responsibilities, we have created this Code of Business Conduct
and Ethics. Additionally, our General Counsel will have the responsibility of
overseeing our adherence to the Code of Conduct.

        This Code of Conduct is not intended to be a comprehensive guide to all
of our policies or to all your responsibilities under law or regulation. It
provides general parameters to help you resolve the ethical and legal issues you
encounter in conducting our business. Think of this Code of Conduct as a
guideline, or a minimum requirement, that must always be followed. If you have
any questions about anything in the Code of Conduct or appropriate actions in
light of the Code of Conduct, you may contact the General Counsel or the Chair
of the Audit Committee.

        We expect each of our directors, officers and employees to read and
become familiar with the ethical standards described in this Code of Conduct and
to affirm your agreement to adhere to these standards by signing the Compliance
Certificate that appears at the end of this Code of Conduct. Violations of the
law, our corporate policies, or this Code of Conduct may lead to disciplinary
action, including dismissal.

I.      We Comply With all Laws, Rules and Regulations

        We will comply with all laws and governmental regulations that are
applicable to our activities, and expect all our directors, officers and
employees to obey the law. Specifically, we are committed to:

        .       maintaining a safe and healthy work environment;

        .       promoting a workplace that is free from discrimination or
                harassment based on race, color, religion, sex, age, national
                origin, disability or other factors that are unrelated to the
                Company's business interests. For more information, see the
                Company's policies on Equal Employment Opportunity and Workplace
                Harassment in the Company's Employment Policies Handbook;

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        .       supporting fair competition and laws prohibiting restraints of
                trade and other unfair trade practices, including price fixing;

        .       conducting our activities in full compliance with all applicable
                environmental laws;

        .       keeping the political activities of our directors, officers and
                employees separate from our business;

        .       prohibiting any illegal payments, gifts, or gratuities to any
                government officials or political party;

        .       prohibiting the unauthorized use, reproduction, or distribution
                of any third party's trade secrets, copyrighted information or
                confidential information; and

        .       complying with all applicable state and federal securities laws.

Insider Trading Policy

        Federal and state laws prohibit trading in securities by persons who
have material information that is not generally known or available to the
public. Employees of the Company may not (a) trade in stock or other securities
while in possession of material nonpublic information or (b) pass on material
nonpublic information to others without express authorization by the Company or
recommend to others that they trade in stock or other securities based on
material nonpublic information.

        The Company has adopted guidelines designed to implement this policy.
All directors, officers and employees are expected to review and follow the
Velocity Insider Trading Guidelines. Certain employees must comply with trading
windows and/or pre-clearance requirements when they trade Velocity securities.

II.     We Insist on Honest and Ethical Conduct By All of Our Directors,
Officers, Employees and Other Representatives

        We have built our business based on excellence in services: not only
quality logistics services that improve the reliability and quality of
operations for multi-location blue chip customers, but quality employees and
representatives who adhere to the very highest standards of honesty, ethics and
fairness in our dealings with all of our business contacts. We place the highest
value on the integrity of our directors, our officers and our employees and
demand this level of integrity in all our dealings. We insist on not only
ethical dealings with others, but on the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships.

Fair Dealing

        Directors, officers and employees are required to deal honestly and
fairly with our customers, suppliers, competitors and other third parties.

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        Between you and our customers and suppliers. We market our technologies
and services fairly and vigorously based on our honesty, creativity and
ingenuity and the proven quality and reliability of our logistics services. In
our dealings with customers and suppliers, we:

        .       prohibit bribes, kickbacks or any other form of improper
                payment, direct or indirect, to any representative of
                government, labor union, customer or supplier in order to obtain
                a contract, some other commercial benefit or government action;

        .       prohibit our directors, officers and employees from accepting
                any bribe, kickback or improper payment from anyone;

        .       prohibit gifts or favors of more than nominal value to or from
                our customers or suppliers;

        .       limit marketing and client entertainment expenditures to those
                that are necessary, prudent, job-related and consistent with our
                policies;

        .       require clear and precise communication in our contracts, our
                advertising, our literature, and our other public statements and
                seek to eliminate misstatement of fact or misleading
                impressions;

        .       reflect accurately on all invoices to customers the sale price
                and terms of sales for products sold or services rendered;

        .       protect all proprietary data our customers or suppliers provide
                to us as reflected in our agreements with them; and

        .       prohibit our representatives from otherwise taking unfair
                advantage of our customers or suppliers, or other third parties,
                through manipulation, concealment, abuse of privileged
                information or any other unfair-dealing practice.

Conflicts of Interest; Corporate Opportunities

        Our directors, officers and employees should not be involved in any
activity that creates or gives the appearance of a conflict of interest between
their personal interests and the interests of the Company. A "conflict of
interest" exists when a director, officer or employee's personal interest
interferes with the best interests of the Company. In particular, without the
specific permission of our Audit Committee (which can delegate such authority to
our General Counsel), no director, officer or employee shall:

        .       be a consultant to, or a director, officer or employee of, or
                otherwise operate an outside business that:

                .       markets products or services in competition with our
                        current or potential products and services;

                .       supplies products or services to the Company; or

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                .       purchases products or services from the Company;

                .       have any financial interest, including significant stock
                        ownership, in any entity with which we do business that
                        might create or give the appearance of a conflict of
                        interest;

        .       seek or accept any personal loan or services from any entity
                with which we do business, except from financial institutions or
                service providers offering similar loans or services to third
                parties under similar terms in the ordinary course of their
                respective businesses;

        .       be a consultant to, or a director, officer or employee of, or
                otherwise operate an outside business if the demands of the
                outside business would interfere with the director's, officer's
                or employee's responsibilities to us, (if in doubt, consult your
                supervisor or the General Counsel);

        .       accept any personal loan or guarantee of obligations from the
                Company, except to the extent such arrangements are legally
                permissible; or

        .       conduct business on behalf of the Company with immediate family
                members, which include spouses, children, parents, siblings and
                persons sharing the same home whether or not legal relatives.

        Directors, officers and employees should attempt to avoid conflicts of
interest. Directors, officers, and employees must notify the General Counsel or
the Chair of our Audit Committee of the existence of any actual or potential
conflict of interest. The General Counsel or our Audit Committee will consider
the facts and circumstances of the situation to decide whether corrective or
mitigating action is appropriate.

Confidentiality and Corporate Assets

        Our directors, officers and employees are entrusted with our
confidential information and with the confidential information of our suppliers,
customers or other business partners. This information may include (1) technical
or scientific information about current and future products, services or
research, (2) business or marketing plans or projections, (3) earnings and other
internal financial data, (4) personnel information, (5) supply and customer
lists and (6) other non-public information that, if disclosed, might be of use
to our competitors, or harmful to our suppliers, customers or other business
partners. This information is our property, or the property of our suppliers,
customers or business partners and in many cases was developed at great expense.
Our directors, officers and employees shall:

        .       not discuss confidential information with or in the presence of
                any unauthorized persons, including family members and friends;

        .       use confidential information only for our legitimate business
                purposes and not for personal gain;

        .       not disclose confidential information to third parties; and

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        .       not use Company property or resources for any personal benefit
                or the personal benefit of anyone else. Company property
                includes the Company internet, email, and voicemail services,
                which should be used only for business related activities, and
                which may be monitored by the Company at any time without
                notice.

III.    We Provide Full, Fair, Accurate, Timely and Understandable Disclosure

        We are committed to providing our shareholders and investors with full,
fair, accurate, timely and understandable disclosure in the reports that we file
with the Securities and Exchange Commission. To this end, our directors,
officers and employees shall:

        .       not make false or misleading entries in our books and records
                for any reason;

        .       not condone any undisclosed or unrecorded bank accounts or
                assets established for any purpose;

        .       comply with generally accepted accounting principles at all
                times;

        .       notify our Chief Financial Officer if there is an unreported
                transaction;

        .       maintain a system of internal accounting controls that will
                provide reasonable assurances to management that all financial
                transactions are properly recorded;

        .       maintain books and records that accurately and fairly reflect
                our transactions;

        .       prohibit the establishment of any undisclosed or unrecorded
                funds or assets;

        .       maintain a system of internal controls that will provide
                reasonable assurances to our management that material
                information about the Company is made known to management,
                particularly during the periods in which our periodic reports
                are being prepared;

        .       present information in a clear and orderly manner and avoid the
                use of unnecessary legal and financial language in our periodic
                reports; and

        .       not communicate to the public any nonpublic information except
                through our Chief Financial Officer or Chief Executive Officer.

                       REPORTING AND EFFECT OF VIOLATIONS

        Compliance with this Code of Conduct is, first and foremost, the
individual responsibility of every director, officer and employee. We attempt to
foster a work environment in which ethical issues and concerns may be raised and
discussed with supervisors or with others without the fear of retribution. It is
our responsibility to provide a system of reporting and access when you wish to
report a suspected violation, or to seek counseling, and the normal chain of
command cannot, for whatever reason, be used.

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Administration

        Our Board of Directors and Audit Committee have established the
standards of business conduct contained in this Code of Conduct and oversees
compliance with this Code of Conduct. They have also charged our General Counsel
with ensuring adherence to the Code of Conduct. While serving in this capacity,
our General Counsel reports directly to the Audit Committee.

        Training on this Code of Conduct will be included in the orientation of
new employees and provided to existing directors, officers, and employees on an
on-going basis. To ensure familiarity with the Code of Conduct, directors,
officers, and employees will be asked to read the Code of Conduct and sign a
Compliance Certificate annually.

Reporting Violations and Questions

        Directors, officers, and employees must report, in person or in writing,
any known or suspected violations of laws, governmental regulations or this Code
of Conduct to Wesley Fredenburg, our General Counsel. Additionally, directors,
officers, and employees may contact our General Counsel with a question or
concern about this Code of Conduct or a business practice. Any questions or
violation reports will be addressed immediately and seriously, and can be made
anonymously. The address and telephone number of these individuals are listed in
the attachment to this Code of Conduct.

        We will not allow any retaliation against a director, officer or
employee who acts in good faith in reporting any violation.

        Our General Counsel will investigate any reported violations and will
determine an appropriate response, including corrective action and preventative
measures, involving the Chair of the Audit Committee or Chief Executive Officer
when required. Directors, officers and employees must cooperate in internal
investigations of potential or alleged misconduct. All reports will be treated
confidentially to every extent possible.

Consequences of a Violation.

        Directors, officers and employees that violate any laws, governmental
regulations or this Code of Conduct will face appropriate, case specific
disciplinary action, which may include demotion or immediate discharge.

Waivers

        Waivers of this Code of Conduct may be made only in a manner permitted
by law.

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Reporting Contacts:
General Counsel:
Name: Wesley Fredenburg
Address: 7803 Glenroy Road
Suite 200
Minneapolis, MN 55439
Phone: (612) 492-2405

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                             COMPLIANCE CERTIFICATE

        I have read and understand the Velocity Express Corporation Code of
Business Conduct and Ethics (the "Code of Conduct"). I will adhere in all
respects to the ethical standards and rules of conduct described in the Code of
Conduct. I further confirm my understanding that any violation of the Code of
Conduct will subject me to appropriate disciplinary action, which may include
demotion or discharge.

        I certify to Velocity Express Corporation that I am not in violation of
the Code of Conduct, unless I have noted such violation in a signed Statement of
Exceptions attached to this Compliance Certificate.

Date: _____________________________          ___________________________________
                                             Name: _____________________________
                                             Title/Position: ___________________

Check one of the following:

[ ]     A Statement of Exceptions is attached.

[ ]     No Statement of Exceptions is attached.

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