September 18, 2020

Aerospace Logistics - What is the latest news? 

Nancy Matthews has worked in the supply chain industry for over 30 years and is the key lead of our aerospace logistics vertical.

Nancy is a global aerospace and aviation leader working in collaboration with a wide variety of global aerospace clients to develop highly customized solutions to address global logistics challenges.

Nancy recently took part in our 'Coffee with Crane' podcast series to share her industry insight and experience.

Below is an exert from the podcast interview 'How COVID-19 is reshaping the aerospace industry'. 

As COVID-19 has impacted the world, how has the virus impacted the Aerospace sector? 

At the beginning when the COVID-19 pandemic was first recognized there were very few airlines that were on track with their flight schedules due to countries going on lockdown. Planes were grounded all over the world which was a unique problem as aircraft were not necessarily in the right location for maintenance for example. A significant percentage of the cargo that's moving around the world for us is transported in the belly hold of a passenger aircraft and all of a sudden that capacity was gone. In addition, we saw an influx in PPE (Personal Protective Equipment) shipments and the cargo was being transported urgently in any capacity that was available including 'preighters', passenger aircraft that airlines converted to carry freight. 

If you look at the aerospace sector in particular, for MRO (Maintenance, Repair, and Overhaul) and AOG (Aircraft on Ground) shipments, the challenge was to find available lift and cargo capacity having the additional problem that flights were being canceled regularly. 

Airlines around the world needed support for the aerospace sector as the pandemic impacted financial results. Since we provide logistics support to many of the top twenty service providers to passengers, we have adapted and learned to focus on current needs and challenges as it is an ever-changing environment even now. The norm today is nothing like the norm we knew in the past. Communication and adaptability as a logistics service provider are key. 

What do you see for the future of the MRO (Maintenance, Repair, and Overhaul) sector, both long term and short term? 

I think short-term we are seeing the shift of moving critical parts being transported to smaller additional parts depots, some of the aftermarket parts suppliers are in a position of having good cash flow. Therefore, they are seizing the opportunity to acquire parts from carriers that are looking to generate cash by selling onhand parts into the market. Some carriers have supplementary parts for example that are unused due to the grounded aircraft. Therefore we are seeing parts depots for MRO's expanding in some of the more obscure markets where there has been little presence in preparation for the future. 

There are many opportunities to get passenger and cargo carriers back in the air as the world opens back up. We have an extraordinary team of logistics experts in the aerospace vertical. We will always support our clients with the opportunities they foresee in their markets and present logistics solutions highlighting any limitations and with complete honesty as to how the operations will be implemented. 

How do you see the airlines recovering from COVID-19? 

As we support the airlines in the aerospace sector, as our clients in MRO for example, they are also our vendors as we purchase freight capacity. We have a mutual interest to determine logistics solutions to help support the recovery. Demand will be driven by passengers flying again on aircraft. For the air cargo carriers, my opinion is that some of the manufacturing bases are going to shift in a world that has discovered that they need more than one source of supply. It became a critical set of circumstances that have been highlighted during this pandemic. As those changes occur, as airlines begin to adapt and implement different routes, for example, Crane Worldwide's aerospace experts will be there to support those changing logistics needs. 

What does the future of aircraft manufacturing look like post-pandemic? 

We are very fortunate to support two of the largest aircraft manufacturers in the world and the programs that we are supporting are continuing to manufacture at a reduced capacity. This impacts the supplier base, the raw materials suppliers, the parts that are moving, and it impacts the quantity of the material and parts that need to be stored. We are looking into larger forward stocking options for example as well as determining how transportation costs can be reduced as the shipment urgency of parts is not as critical if the production rate slows down. It is a sector that is changing and as a logistics partner, it's all about finding solutions that are cost-effective and efficient to support the changes going forward. 

If you are interested in learning more about the aerospace supply chain support available from the logistics experts at Crane Worldwide, please reach out with your inquiry below.

You can also listen in to the full podcast here:

Podcast