Last Friday’s global IT outage will cause “disruption and delays to air cargo services that could take days or even weeks to fully resolve” according to freight rate benchmarking and market analytics platform Xeneta.
On Friday, we reported on how the IT problems had impacted the Port of Gdansk. An advisory by UK-based logistics company Woodland Group also stated that a number of “shipping lines, customs systems, and transport businesses” were also affected.
This included the Port of Felixstowe, where the processing, collecting and delivering of containers was not possible. In addition to this, the Destin8 Port Community System that enables all sections of the maritime industry to facilitate the movement of cargo was also unavailable.
In a press release, the company stressed that air cargo supply chains were already under pressure prior to the IT failure. Xeneta says that global demand for air freight in June increased by 13% compared to the same month in 2023, which is a continuation of the upward trend seen from the start of the year to date.
Moreover,during the same period, air freight supply has increased by a noticeably lesser amount of 3% year-on-year.
“Air supply chains are highly complex, so a global disruption of this scale could have a severe impact. Planes and cargo are not where they are supposed to be and it will take days or even weeks to fully resolve,” said Niall van de Wouw, Xeneta Chief Airfreight Officer, commenting on Friday’s events.
The result of this, says Xeneta, is less available capacity in the market and increasing costs for shippers.
In Van de Wouw’s opinion, the surge in demand for ecommerce seen this year will mean air cargo providers shall have a tough time moving the cargo that’s been delayed by the IT outage:
“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 US. Available capacity in the market is already limited so airlines are going to struggle to move cargo tomorrow that should have been moved today.
Van de Wouw added that the IT outage is yet another reminder of the vulnerability of the world’s supply chains.
“We have seen in 2024 how vulnerable our global maritime supply chains are following the disruption caused by conflict in the Red Sea. Now we see vulnerabilities exposed in our air supply chains due to IT failure. We benefit greatly from technology and have grown dependent on it – but there is a price to pay when things go wrong.”