Bfk92 | E+ | Getty Images
The CrowdStrike software bug that brought down Microsoft operating systems and caused the largest IT outage in history caused disruptions at US and global ports, with highly complex air transport systems taking the brunt of the hit, logistics experts say, as global airlines freeze flights.
“Planes and cargo are not where they are supposed to be and it will take days or even weeks to fully resolve,” Niall van de Wouw, head of air transport at supply chain consultancy Xeneta, said in a statement shared with CNBC. “This is a reminder of how vulnerable ocean and air supply chains are to IT failure.”
Thousands of flights were grounded or delayed at the world’s biggest air cargo hubs in Europe, Asia and North America.
The new edition for the global supply chain comes amid an increase in global demand, with shipments up 13% year-on-year in June. Air freight supply has increased, but only by 3% year-on-year, already causing higher costs for shippers due to limited capacity, according to Xeneta. “Charters already had concerns about air cargo capacity due to the huge increases in demand in 2024, driven in large part by the phenomenal growth of e-commerce products exported from China to Europe and the US,” said van de Wow. “Capacity available in the market is already limited, so airlines will find it difficult to move cargo tomorrow that should have been moved today.
Pete Buttigieg, the US Secretary of Transportation, told CNBC on Friday morning that what the administration is watching during the day, as the issue has been identified, is “the kind of ripples or cascades as they repeat everything. networks are back to normal.”
“These systems, these flights, work so tightly, so back-to-back that even after you address a root cause, you can feel those effects throughout the day,” Buttigieg said.
He said the FAA’s operational systems, such as air traffic control or most systems within the US Department of Transportation, as well as major urban transit systems such as New York’s MTA, were operating although there could be “significant” problems. all day. But “in terms of the airlines themselves, we will certainly expect more there,” he said.
FedEx said in a statement that it has activated contingency plans, but added that “delays are likely for package deliveries” expected on Friday.
UPS said in a statement that computer systems in the US and Europe were affected, but its airline continues to operate efficiently and drivers are on the road delivering for customers. “We continue to work to resolve all issues as quickly as possible; there may be some service delays,” UPS said.
Ports, freight rail lines, report some problems, but normal operations
Most rail lines and ports fared better after some early morning disruptions.
Only one major U.S. freight railroad reported issues related to the IT outage Friday morning, with Union Pacific experiencing varying levels of impact on its network and some delays in processing customer shipments. By Friday afternoon, Union Pacific said it was “open for business again” and the majority of its customers’ loads were moving, with full liquidity returning to its network.
Other major freight operators, including CSX, Norfolk Southern and BNSF, a subsidiary of Berkshire Hathaway, said their operations were not currently affected.
Buttigieg said that at ports, small issues can turn into a big issue, noting that even when ships and cranes are operating, gates were affected, meaning trucks could not enter or exit, leading to delays at some ports, but they are “up and running and open for business today,” he added.
The Port of Houston, the fifth largest port in the US, said it experienced “major system outages” overnight but said all its systems are now up and running with “minimal operational delays”.
The Port of Los Angeles, the nation’s largest port, confirmed to CNBC that one of its terminals, APM Terminals, was temporarily out of service but was back up early this morning. In an email to customers, APM, a subsidiary of Maersk, advised trucking customers that the port was “able to recover relatively quickly” and resumed operations around 2am. All drivers who were unable to complete their pickups were told to contact the company’s import team so they could secure a new appointment to be exempted from the compensation ban for these containers.
Mario Cordero, executive director of the Port of Long Beach, said there was minimal impact at some of its terminals, but systems are up or in the process of being restored.
The Port of New York and New Jersey reported a delay in opening two terminals, but within hours, the terminals were back up and running.
“The Port Authority has been working closely with affected terminal operators through the night, helping them recover, while also communicating updates through multiple channels to the port’s vast community of stakeholders,” said Bethann Rooney, Port Authority director of ports News York and New Jersey. He said the port was able to launch “a quick and effective response to bring the cargo back up”.
All sea terminals opened by 8 am. The port authority was not affected by the outage.
Not all ports use systems that incorporate CrowdStrike software, with the Port of Savannah and the Port of Virginia reporting “normal operations.”
Emily Stausbøll, senior shipping analyst at Xeneta, told CNBC that the IT outage could cause significant disruption to ports if ships are prevented from unloading and loading containers, and that could spill over into the supply chain.
“There are also impacts on all internal supply chains if truck and rail services are unable to pick up and unload cargo at the port,” said Stausbøll.
He noted that in May, the port of Charleston on the US East Coast was shut down for two days due to a software failure, leading to a 200% increase in port congestion. “Port congestion was a major problem in 2024. While it is now reducing, there is no slack in the system and any disruption will push the needle back into the red,” he said.
Shipping intelligence firm Kpler told CNBC that early indications were that the global IT outage was affecting operations at global ports, including Gdansk, Poland, and Dover, Felixstowe and Liverpool in the United Kingdom.
Rotterdam, Europe’s largest port, advised customers on its website of possible disruptions, but in an email to CNBC, a port spokesperson said critical port operations of the Harbor Master Division and maritime service providers remain operational. “However, some companies at the port, including a container terminal, are experiencing problems due to the outage and have adjusted their processes. They are working on a solution.”
Matt Wright, senior commodity analyst at Kpler, said the outage could lead to some delays at affected ports, but with Microsoft and Crowdstrike reporting a fix is in place, the resumption of normal operations later today will mean unlikely to cause significant delay.
