Updated July 30, 2024
Summary
- A CrowdStrike update caused widespread outages for Windows systems. This impacted numerous industries and applications globally, including airlines, hospitals, and banks.
- Thousands of flights globally were cancelled or delayed as a result of the Microsoft outage, with some airlines being slow to recover and cancelling flights through last week.
- Air freight saw a 25% increase in transit time, but has returned to normal levels.
- Last Mile on-time performance suffered for two days, dropping 6% before recovering to normal levels.
CrowdStrike Update Causes Major Disruptions for Microsoft Systems
CrowdStrike’s recent update led to widespread outages affecting Windows systems, with significant ripple effects across various sectors. Industries such as airlines, banks, and hospitals reported major disruptions as a result.
While most applications were quickly restored following a fix from CrowdStrike and subsequent system reboots, the recovery for airlines was slower to recover, even resulting in a DoT investigation of commercial airline Delta related to slow recovery times and consumer protection violations. Due to the slower recovery, air freight and last mile both saw impacts.
Impacts to Air Freight
Air freight is the most expensive mode of transportation, but shippers pay the premium due to the speed in which goods are delivered. Air freight is shipped in a blend of specific freight carriers as well as commercial airlines, and both types were impacted by the outage. The below graph outlines the average amount of transit time (measuring from the time a shipment is booked to when it is delivered) of air freight.
Prior to the CrowdStrike update, the average transit time sat at ~3.6 days. Within the few days following the outages, transit time jumped by 25%, or an additional day of transit time. Transit time has since levelled out back to 3.6 to 3.8 days, but the impacts of the outage lasted 5 days until returning to normal.
Impacts to Last Mile Delivery
The Last Mile industry, which relies heavily on air freight due to the demand for rapid deliveries, was also affected. Weekly on-time performance for Last Mile shipments has remained steady throughout 2024, fluctuating between 85% to 87% after an early January dip as the chart below demonstrates. Please note that on-time performance is measured based on the date provided to the customer at the time an order was placed.
There is a drop of 2% in performance levels for Last Mile during the week of the outage. However, the last mile industry appears to have recovered quickly. Taking a closer look at the daily on-time performance, there were only two days where service levels suffered.
Between July 18th and July 20th, on-time performance dropped by 6% to a low of 79% on-time on July 20th. However, by the 21st, performance recovered and returned to 86%, showing a quick response in Last Mile and a strong ability to recover with marginal interruptions.
Impacts to Other Transportation Modes
Although air transport has been the most affected, other transportation modes have also experienced issues due to the IT outages. Some port terminals, such as APM at the Port of Los Angeles, faced technical difficulties the morning of the outage, but these problems were resolved swiftly. Trucks affected by the outage rescheduled appointments, but no significant backlog accumulated.
Rail transport encountered minor issues as well. Union Pacific reported varying levels of impact across its network, but freight movement continued. The overall impact was minimal.
There were also some interruptions in distribution center and warehouse operations, including automation inside warehouses and yard management. While these interruptions were able to shut down individual warehouses temporarily and were impactful to those individual companies, there was not an overall impact to truckload performance during this time.
Key Takeaways
While technology in supply chain has helped streamline and optimize production, decrease transit times, and create major cost savings over the years, it is important to remember that technology is not foolproof. There is always a risk of future outages, cyber-attacks, and even temporary Wi-Fi outages that have the potential to interrupt operations. Companies should use this as a reminder that there should still be manual backup plans in place. Clear standard operating procedures and training for what to do when technology fails is important to keep freight moving.
About project44
project44 is on a mission to make supply chains work. Movement by project44, the only high-velocity supply chain platform, enables shippers, LSPs and carriers across the globe to reduce costs, optimize operations, deliver an exceptional customer experience and drive greater resiliency and sustainability. Having built the industry’s largest and most connected ecosystem, project44 provides visibility into over 1 billion shipments annually for over 1,300 of the world’s leading brands.
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Disclaimer: The information conveyed herein, shared solely for summary and not contractual purposes, comes from both project44 and third-party reporting. The project44 data does not include all available market information, and project44 has not undertaken to independently verify the third-party reporting. Similarly, this type of data changes from day-to-day. Accordingly, the reader should not rely on this reporting to make any business decisions, and project44 expressly disavows any liability arising from any such reliance.
