How CrowdStrike IT outage is hitting global supply chain

The CrowdStrike software bug that crashed Microsoft operating systems and caused the largest IT outage in history caused disruptions at U.S. and global ports, with highly complex air freight systems suffering the heaviest hit, according to logistics experts, as global airlines grounded 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, chief air freight officer at supply chain consulting firm Xeneta, said in a statement shared with CNBC. “This is a reminder of how vulnerable our ocean and air supply chains are to IT failure.” 

Thousands of flights were grounded or delayed at the world’s largest air freight hubs in Europe, Asia and North America.

The new issue for the global supply chain comes amid a rise in global demand, with shipments up 13% year-over-year in June. Air freight supply has increased, but only by 3% year-on-year, already causing higher costs for shippers due to the limited capacity, according to Xeneta. “Shippers already had concerns about air freight capacity due to huge increases in demand in 2024, driven largely by the extraordinary growth in e-commerce goods being exported from China to Europe and the U.S.,” van de Wouw said. “Available capacity in the market is already limited so airlines are going to struggle to move cargo tomorrow that should have been moved today.

Pete Buttigieg, U.S. Secretary of Transportation, told CNBC on Friday morning that what the government is watching for over the course of the day, as the issue has been identified, is “the kind of ripple or cascade effects as they get everything back in their networks back to normal.”

“These systems, these flights, they run so tightly, so back to back that even after a root cause has been addressed you can still feel those impacts throughout the day,” Buttigieg said.

He said the FAA’s operational systems, like air traffic control or most systems within the U.S. Department of Transportation, as well as major urban transit systems, such as New York City’s MTA, were operating though there could be “spot” issues throughout the day. But “as far as the airlines themselves we are going to definitely be expecting more there,” he said.

FedEx said in a statement that it has activated contingency plans, but added that “potential delays are possible for package deliveries” expected Friday.

UPS said in a statement that computer systems in the U.S. and Europe were affected, but its airline continues to operate effectively, and drivers are on the roads delivering for customers. “We are continuing to work to resolve all issues as quickly as possible; there may be some service delays,” UPS stated.

Ports, freight rails, report some issues, but normal operations

Most rails and ports were faring better after some early morning disruptions.

Only one major U.S. freight railroad reported issues related to the IT outage, with Union Pacific confirming in an…