Global IT Outage Disrupts Air Cargo Supply Chain, Major Ports
A global IT outage caused by a glitch in Microsoft’s cloud computing services grounded thousands of flights worldwide Friday morning, disrupting the flow of air cargo and potentially throwing a wrench in freight movement across sea and land.
The “big three” domestic airlines—American Airlines, Delta and United—paused their global flight schedules for multiple hours, while cargo handling operations at global airlines such as Air France-KLM and Lufthansa were also disrupted.
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Delta and United have resumed “some” flights, while American says the airline was able to “safely reestablish our operation.” The airlines expect more delays and cancellations throughout Friday.
According to aviation analytics provider Cirium, 3,343 flights had been cancelled globally as of 10 a.m. EST.
Air cargo supply chains were already under significant pressure prior to the IT failure as demand far accelerates supply—an indicator that the fallout from the outage “will take days or even weeks to fully resolve,” according to Niall van de Wouw, chief airfreight officer at Xeneta.
Global air cargo demand in June increased by 13 percent year over year, Xeneta says, but air freight capacity has increased by a much lesser 3 percent in the same period.
“Available capacity in the market is already limited so airlines are going to struggle to move cargo tomorrow that should have been moved today,” said van de Wouw in a statement. “These incidents can take three times as long to resolve as the length of time they last, but that is very much dependent on the scale of the IT failure and the market conditions at the time it occurs.”
Aside from the concerns for air cargo, some major global ports saw a brief impact.
A representative at the Port of Los Angeles told Sourcing Journal that one container terminal at the port was affected by the outage overnight.
“That terminal is now fully operational and all trucks in the queue have been processed into the terminal,” the spokesperson said.
At the Port of Long Beach, four terminals experienced computer issues overnight, but were able to resolve the problems with minimal disruptions, a representative said. All marine terminals are open and operating, with cargo operations commencing normally this morning.
Port Houston’s two container terminals—Barbours Cut and Bayport—both closed Friday morning for multiple hours, before reopening again at 9:25 a.m. local time.
At the U.K.’s largest port, the Port of Felixstowe, truckers initially could not gain access. The port gave an update that haulage and rail operations have since recommenced, with the port working up to full capacity as soon as possible.
“While some operators have been able to resume operations following the outages, it remains unclear how long it will take local ocean and air cargo operators to clear the backlog that accumulated due to the technical issues,” according to a note from Everstream Analytics. “Localized increases in port and airport congestion as well as cargo processing delays at these facilities should be anticipated in the coming days as well.”
FedEx has experienced disruptions throughout its networks due to the outage and has activated contingency plans to mitigate impacts. The logistics giant says potential delays are possible for package deliveries with a delivery commitment of July 19, 2024.
UPS sang a similar tune, saying that while its network is operating and delivering in all areas, that there is a potential for delivery delays. Like FedEx, contingency plans are in place to help ensure that shipments arrive at their final destinations “as quickly as possible.”
North American railroads have seen less of an impact than their cohorts across the global supply chain, with BNSF, Canadian National and CSX all saying there was no indication that their systems or operations have been impacted by the outage.
One railroad, Union Pacific, said the software outage has had varying levels of impact across its network. The company said it has had to implement backup protocols so they can communicate with teams and dispatchers. The railroad says it is experiencing some processing delays in customer shipments as we address targeted areas impacted on our network.
The incident, which affected Microsoft Windows devices, was attributed to a faulty software update at cybersecurity company CrowdStrike. The glitch also knocked banks and hospital systems offline, and caused technology outages for many businesses, while some media broadcasts could not air.
CrowdStrike CEO George Kurtz wrote on LinkedIn that the event was not a security incident or cyberattack, and he told NBC that the company has since resolved the issue.
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