Spare Parts: Stockpiling vs. Just-in-Time Procurement
September 2, 2025
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Spare parts look small on the P&L until they do not. Longer lead times, price inflation on critical items, and surprise breakdowns can wipe out voyage profit. Cash trapped on shelves drags returns, while running too lean risks days off hire. In a market that rewards uptime and schedule integrity, the parts strategy becomes the savings strategy.
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The Problem
Rising prices, port delays, tighter schedules. Parts strategy equals savings strategy.
Operating Pressures
- Supply chain uncertainty and longer lead times for critical spares
- Inflation in OEM parts and logistics surcharges
- Unplanned breakdown risk that threatens schedule integrity
- Port congestion and limited repair windows
Financial Stakes
- Cash tied up in inventory versus downtime and off-hire cost
- Price risk on just-in-time purchases during spikes
- Expedited freight and last-minute yard premiums
- Impact on charter party performance and penalties
Goal
Minimize lifetime cost per sailing day by balancing inventory carrying cost with downtime risk and purchase price volatility.
📦 Stockpiling
Security through holding inventory on hand.
✅ Advantages
- Immediate access to critical spares when breakdowns occur
- Reduced risk of off-hire due to waiting for parts
- Ability to lock in prices before inflation spikes
- Less exposure to supply chain bottlenecks
⚠️ Drawbacks
- Capital tied up in inventory sitting on shelves
- Storage, insurance, and obsolescence costs
- Risk of over-ordering and wasted stock
- Requires active inventory management systems
🚚 Just-in-Time
Lean procurement with parts arriving when needed.
✅ Advantages
- Frees up working capital for other investments
- Lower storage, insurance, and inventory costs
- Reduced risk of parts becoming obsolete
- Lean operations with tighter cash cycles
⚠️ Drawbacks
- Exposed to supply chain delays and disruptions
- Higher prices for urgent or expedited orders
- Increased risk of costly downtime/off-hire
- Dependence on supplier reliability and logistics
Spare Parts ROI Calculator
Compare annual stockpiling cost against expected JIT downtime exposure. Adjust the assumptions and see which strategy is cheaper.
Assumptions Editable
Advanced options
Note: The calculator compares carrying cost of stockpiled inventory with expected downtime cost under JIT. Purchase price for consumed parts typically applies to both strategies and is excluded in the comparison by default.
Results Auto updates
Annual cost of stockpiling
$0
Carrying rate and quantity shown below
Estimated JIT downtime exposure
$0
Downtime days and failure rate shown below
Which strategy is cheaper
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Delta: —
| Metric | Value |
|---|
Stockpiling cost = Part price × (capital% + storage%) × safety stock
JIT exposure = Downtime/day × lead time × failures per year
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The Bottom Line
There is no single right answer when it comes to spare parts strategy. The decision hinges on cash position, vessel age, and operating environment.
- Owners with strong liquidity and diverse global trades often prefer Just-in-Time to free up capital and reduce storage costs.
- Operators in risk-prone regions or running older vessels lean toward Stockpiling to avoid costly off-hire from unexpected breakdowns.
Many fleets apply a hybrid approach: minimal stock on hand for critical items, supported by reliable suppliers for everything else. In practice, profitability often comes from finding the right balance.
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