Delivering a spare part from supplier to buyer involves many different steps executed by many different parties. Satair’s Julia Kerres walks us through the process.
Getting aviation spare parts from point A to point B is a complex process.
Many players are involved and several things could go wrong along the way. The parts could be delayed, they could get damaged during transit, or even worse, they may never reach their destination at all.
Satair training services manager Julika Kerres said that there are a number of interconnected reasons that aviation parts logistics are so complicated.
The first is the wide array of products involved. Some are small and easy to transport while others are oversized and require special machinery and vehicles to move. Sometimes what needs to be transported is dangerous and needs to be handled very carefully.
Another complicating factor is the connection between time and money. When there’s an AOG (aircraft on ground) situation, the transport of the part or parts that will get the plane back in service needs to be fast – even if it comes at a premium.
“The faster we need the part, the more money we have to invest,” Kerres said.
The third complication is the need to navigate customs and shipping regulations that can vary from country to country. And fourth, the performance of global freight forwarders is not always up to par.
“We have to make sure to have a firm network of forwarders that cover all priorities and eventualities,” Kerres said.
Incoterms provide a universal framework
Fortunately, there is a system in place to both facilitate the shipping process and clearly define who does what at the various stages of a part’s journey.
That system is the International Chamber of Commerce’s incoterms rules. Incoterms, short for “international commercial terms”, establish common terms to regulate the transport of goods by boat, truck, train or plane.
“Incoterms are part of each and every purchase agreement,” Kerres said. “In order to untangle the complexity, we need to have a clear set of terms that identify exactly the responsibilities of the buyer and the responsibilities of the seller when it comes to the delivery of a spare part from A to B.”
There are eleven incoterms that regulate global shipping and clearly divide the transport obligations, costs and risks between buyer and seller. These terms set the hand-over point by defining who arranges and pays for the transport of goods and which party bears the risk if the transportation cannot be carried out or if the goods are lost or damaged in transit.
Under a free carrier agreement (FCA), for example, the seller agrees to pack the parts, inform the freight forwarder and clear the parts for export before handing the rest of the process over to the buyer.
Kerres explains some of the other incoterms arrangements as well as other aspects of transport management in the aviation industry in the video below.
“Managing the transport part and the logistic supply chain is not easy. But the awareness of incoterms and the corresponding risks in the supply chain, on the one hand, and the selection of the right forwarder, on the other hand, certainly helps to bring my part on time, safe and efficient, from A to B,” Kerres said.