Trade experts have warned that last week’s Microsoft and CrowdStrike software outage could disrupt international supply chains for weeks to come, as the air cargo industry struggles to work through an extensive backlog after 8.5m computers were hit.
Late on Friday (19 July), a massive tech failure hit systems around the world.
In the chaos, flights were grounded across multiple countries and several airlines cancelled flights entirely, with lengthy queues and extensive delays reported.
What happened?
The problem originated with a software update by third-party provider CrowdStrike. According to a statement from CrowdStrike, a defect in a routine content update was responsible.
The system is now working normally, the security provider says. The company has provided a page with ongoing updates and advice on how to mitigate any damage.
Microsoft estimates that 8.5m computers were affected. Although the outage was not directly caused by any of Microsoft’s technology, the firm still said it was working “around the clock” and providing ongoing support to fix the issue.
Freight grounded
At the time, freight companies warned of the significant impact on their operations.
A spokesperson for AF-KLM Cargo told The Loadstar: “The impact on our operations is severe, both in Charles de Gaulle and Amsterdam airports.” An update on Saturday afternoon said that customers resume booking,
Other air freight companies, such as Lufthansa and American Air, said they had experienced disruption. Air hubs including Frankfurt, Gatwick and Amsterdam Schiphol all reported that they were affected.
Several US ports said they had experienced disruption but that this had largely been mitigated, according to CNBC.
Long-term headache
Although all companies involved said the incident was resolved as soon as possible, supply chains are expected to suffer for the next few weeks.
As air freight tends to work on a ‘just in time’ basis, trade experts have warned that even a small delay could have a knock-on impact on global supply chains.
Marco Forgione, director general at the Chartered Institute of Export & International Trade, said that the disruption had the potential to “cause further problems in planning and scheduling for importers, exporters and consumers globally,” and called it another “unwanted headache” for international traders:
“We are already seeing increased costs in shipping due to the ongoing crisis in the Red Sea. This has caused the demand for the air freight market to soar, with double-digit growth in volumes in 2024, as business look at alternative routes to ship their products.”
Hundreds of flights were reported grounded and it could take weeks to fully resolve.
Niall van de Wouw, chief air freight officer for Xeneta, said: “Air supply chains are highly complex, so a global disruption of this scale could have a severe impact.
“Available capacity in the market is already limited so airlines are going to struggle to move cargo tomorrow that should have been moved today.”
The cost of air freight has risen before the disruption, with demand growing faster than supply.
Data from Xeneta shows that global demand for air freight increased by 13% in June, compared to the same point in 2023, while capacity only rose by 3%.
Phishing warning
The UK National Cyber Security Centre (NCSC) warned that scammers might take advantage of the situation, and warned businesses and individuals to be alert for any phishing attacks:
“Note that an increase in phishing referencing this outage has already been observed, as opportunistic malicious actors seek to take advantage of the situation.
“This may be aimed at both organisations and individuals.”
‘Phishing’ is a technique criminals use to pretend to be a reputable company or individual in order to steal sensitive information, like bank account details or passwords.
