Global IT failure will add further pressure to already-strained air cargo supply chains
A global IT failure that impacted major airports and airlines will cause disruption and delays to air cargo services that could take days or even weeks to fully resolve.
The IT failure, which took place on Friday, affected Microsoft systems and has seen thousands of flights grounded or delayed at the world’s largest air freight hubs in Europe, Asia, and North America.
Niall van de Wouw, Xeneta Chief Airfreight Officer, said: “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.”
Latest data from Xeneta – the leading ocean and air freight rate benchmarking and intelligence platform – shows air cargo supply chains were already under pressure prior to the IT failure.
Global demand in June increased by +13% compared to the same month in 2023, continuing an upward trend seen throughout 2024 to date.
At the same time, air freight supply has increased by a much lesser +3% year-on-year.
The result is less available capacity in the market and increasing costs for shippers, with the global air cargo spot rate climbing +17% year-on-year in June to stand at USD 2.62 per kg.
Van de Wouw said: “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.
“These incidents can take three times as long to resolve as the length of time they last, but that is very much dependent on the scale of the IT failure and the market conditions at the time it occurs.”
Van de Wouw believes it is another reminder of the vulnerability of the world’s supply chains.
He said: “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.”