Global supply chains rattled by CrowdStrike outage

The recent IT outage caused by a flaw in CrowdStrike’s cybersecurity software, that impacted computers running Microsoft Windows, has created significant disruptions across global supply chains, causing delays that could affect movement of goods for weeks.

On July 19th, 2024, CrowdStrike’s software bug caused 8.5 million computers running Microsoft Windows to crash, leading to the largest IT outage in history, impacting critical sectors such as transportation, finance, and retail. Airports, ports, and railways globally were hit, with planes and cargo stranded at major hubs in Europe, Asia, and North America. The outage disrupted complex logistics operations, grounding thousands of flights and stalling cargo movements.

Impact on Air Freight

Air freight was particularly hard-hit, with a massive impact on logistics and transportation networks. Thousands of flights were grounded or delayed, exacerbating existing concerns over air freight capacity. Demand for air freight has already surged, driven by a 13% year-over-year increase in shipments, primarily fuelled by the booming e-commerce sector. The limited increase in air freight capacity, only 3% year-over-year, means that airlines were already struggling to meet demand before the outage.

The sudden halt in air freight operations left cargo stranded, with airlines now facing the challenge of moving current cargo alongside the delayed shipments. This backlog is expected to disrupt planning and scheduling globally for days, if not weeks.

Impact on Sea freight

Global ports also felt the strain, with major ports including Gdansk, Rotterdam, Dover, Felixstowe and Liverpool experiencing significant disruptions. Some ports had to halt container shipments, causing delays in terminal operations, while ports like Houston and Los Angeles, managed to restore systems quickly, mitigating the potential for long-term disruptions.

Not all ports were equally affected. The Port of Savannah and the Port of Virginia reported normal operations, as their systems did not incorporate the flawed CrowdStrike software. This variance in impact highlighted the differing levels of resilience across global supply chain nodes.

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The swift response by CrowdStrike and Microsoft to implement a fix prevented a more severe global crisis, but the incident serves as a wake-up call.

Ensuring supply chain resilience is not just about preventing disruptions, but also about having the capacity to recover quickly and maintain operational continuity in the face of unforeseen challenges.

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