FedEx has admitted that this summer’s cyber-attack on TNT Express – which also hit WPP, Mondelez International and Reckitt Benckiser – has cost the parcel business over $300m (£222m) in lost business, with the system meltdown wreaking havoc across its operation.
In FedEx’s Q1 results, the company cites the effects of the so-called “NotPetya” ransomware virus for the major decline in net income, down 16% from $715m a year ago to $596m.
Within days of the attack, TNT was forced to resort to WhatsApp for internal communications as its email system had become inaccessible.
There were also reports that its depots had been “pushed to their limit”, with tens of thousands of unprocessed packages. At the time, the UK Federation of Small Businesses claimed firms were being “crippled” by the impact of the attack.
According to FedEx’s chief information officer Rob Carter, the company believes it was exposed via an infected tax software update used by its Ukrainian office, although he believed no customer data had been compromised and the malware had not spread to FedEx’s wider systems.
The company, which bought TNT in 2015 for £3.2bn, blamed legacy systems it inherited for the issue.
In a conference call for analysts, Carter said: “This was not an ordinary cyber-attack. It was the result of [a] nation state targeting Ukraine and companies that do business there.
“At the time of the attack, there was already work under way to replace TNT legacy systems with FedEx technology. In the wake of the attack, these efforts have been accelerated. The recovery and restorations of TNT Express’s global operations and IT systems has included every facility, hub and depot.
“Many systems that were not impacted by the virus were also fortified and rebuilt to ensure additional focus on security.”
Consumer goods company Reckitt Benckiser recently warned the issue was likely to have cost it £110m.
David Jinks, head of consumer research for global parcel broker Fastlane International, said: “As anyone who used TNT earlier this year will know, the impact of the cyber-attack created significant operational challenges.
“NotPetya malware wasn’t a bug that could be fixed on payment of a ransom, instead it seems designed to cripple a whole country, Ukraine. Unfortunately, it seems likely that the international nature of TNT’s business meant it became collateral damage in an ongoing cyber war.”
However, he praised the company’s reaction. “TNT staff on the ground worked miracles to keep shipments moving and stem the backlog. The vast majority of TNT Express services resumed during the quarter – and all of its critical operational systems.”
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