Latency penalty in Ethernet links beyond 10Gb/s is due to forward error correction (FEC) blocks. In the worst case a single-hop penalty approaches the latency of an entire cutthrough switch. Latency jitter is also introduced, making latency prediction harder, with large peak to peak variance. These factors stretch the tail of latency distribution in Rackscale systems and Data Centers, which in turn degrades performance of distributed applications. We analyse the underlying mechanisms, calculate lower bounds and propose a different approach that would reduce the penalty, allow control over latency and feedback for application level optimisation.