Whenever you hear the word ‘counterfeit,’ no doubt you immediately think of a knock-off designer bag or stack of fake greenbacks. Unfortunately, those were the old days.
As we move into the age of 3D printing, automation, and ubiquitous technological advancement, almost anything can be counterfeited. And though it may be surprising to some, trucking is not immune. The unfortunate truth is, the truck parts aftermarket is victimized by counterfeiting.
Where’s The Problem?
The Federal Trade Commission (FTC) and World Customs Organization (WCO) together estimate that counterfeiting costs the world’s motor vehicle parts industries up to $12 billion a year; no small number. In the United States it comes in around $3 billion. That’s more than the market capitalization of some major companies.
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According to Tim Kraus, president and chief operating officer of the Heavy Duty Manufacturers Association (HDMA), the heavy-duty truck parts aftermarket absorbs an annual hit of $30 million to $50 million. Over the past 15 years, fleet property counsel professionals have had to deal with thousands of counterfeit matters.
The main goal is to get these products out of the marketplace. Taking a hit to the bottom line or getting reimbursed for the infringement is less important than simply removing the bad products from the scene.
Who Has The Edge?
New technologies have made it possible for counterfeiters to introduce fake products that are practically indistinguishable from the real thing. As fleet managers focus on controlling costs, it’s easy for the bad guys to slip in questionable products.
The problem is exacerbated by a lack of knowledge about certain parts. There’s a lack of a certain measure of experience as the trucking industry scrambles to fill thousands of jobs. Too much emphasis is placed on what is cheap, and not on the part’s expected life cycle or performance.
As trucking expands, both the supply and the demand for parts grows. This puts counterfeiters in the unique position of undercutting prices while increasing production.
How Is It Organized?
When people think of organized crime, they think of drugs, human trafficking, and embezzlement. Rarely does counterfeit vehicle parts even reach the top ten list. But let’s not forget, these guys are criminals.
Their distribution organizations have the same motivation: Money. They sell a product that people want and they do it at deeply discounted prices. In the case of heavy-duty truck parts, while quality is inconsistent, the price discounts can be as deep as 50 to 60 percent.
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Those working in the aftermarket truck parts market have an entrepreneurial nature. People find ways to sell things for a profit and find certain niches in which they can hawk their wares, whether they are consciously aware of their counterfeit nature or not.
Brake-related products are the most popular target for counterfeiters. Other common counterfeit parts are seals, filter, and bearing products.
Obviously any one of these categories can have a major impact on truck safety and fleet liability. The World Bearing Association has even created a Stop Fake Bearings platform to help educate customs officials on what to look for.
How Should Trucking Respond?
Some companies are actively aggressive about dealing with counterfeiters. They’ll target specific distributors they know are selling counterfeit parts. One way to do this is through cease-and-desist letters. No company wants their reputation ruined, whether they are a knowing partner in crime or not.
Fleet managers should also be on the lookout for instances where products have been ‘treated,’ either through coatings or cryogenics. Of course, not all treatments are bad. Legitimate treatments can have a positive impact on the part’s performance and life cycle. Counterfeit treatments are likely to leave the part brittle and unsafe.
Another area of concern is in foreign market parts. These are parts brought in from other markets that may look similar, but are not designed for use in the target market.
One good way to sniff out potential counterfeit parts is to try and get a sample of the product and the packaging. This way it can be examined and inspected independently. If a part is a journal cross of a universal joint, for instance, technicians can pull off the bearing cup to inspect the guts.
In the end, whether we like it or not, aftermarket part counterfeiting is here to stay. How trucking deals with it will determine how much the financial impact can be mitigated over the long term.
from Quick Transport Solutions Trucking Blog http://ift.tt/1Lc6Axe
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