Fraud Attack

FedEx Warns TNT Might Never Fully Recover From June Cyberattack

As FedEx Corp.’s TNT unit is still working to fulfill deliveries and catch up on some transactions by hand, the company said its information systems may never fully recover from a June cyberattack that is also expected to affect its earnings.

According to Bloomberg Technology, FedEx fell 3.1 percent to $212.26 at 12:29 p.m. in New York, marking the second-sharpest decline in the S&P 500 Index. TNT facilities are functioning, but they have been forced to rely on manual processes for a significant portion of operations.

“The biggest risk to FedEx is potential loss of market share,” said Kevin Sterling, a senior analyst at Seaport Global Holdings. “You’ve got to believe DHL and UPS are calling up customers” in Europe to lure them away from FedEx. “Customers like to track things, and they may not be able to.”

FedEx acquired Dutch shipping company TNT Express for $4.8 billion last year to compete with United Parcel Service Inc. and Deutsche Post AG’s DHL in Europe. TNT primarily serves the industrial, automotive, high-tech and healthcare industries.

In June, cyber criminals demanded $300 in cryptocurrency to unlock infected computer networks. Other operations haven’t been affected by the attack, and the company said it found no evidence of a data breach or information lost to third parties.

“We cannot yet estimate how long it will take to restore the systems that were impacted, and it is reasonably possible that TNT will be unable to fully restore all of the affected systems and recover all of the critical business data that was encrypted by the virus,” FedEx said.

Danish shipping company A.P. Moller-Maersk, also a victim of the cyberattack, told customers on its website that it would reactivate transport-plan notifications and cargo checklists starting Monday. The company said last week that it was “steadily getting closer to business as normal.”

FedEx is still evaluating the financial effect and said it didn’t have insurance that would cover the cyberattack. It is too soon to quantify lost revenue from decreased shipping volumes and other costs of putting contingency plans and repairs in place, the company said.


Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

Click to comment