FedEx says TNT Express customers are still “experiencing widespread service and invoicing delays” three weeks after the cyber-attack on 28 June, which had significant impact on TNT’s worldwide information systems.
FedEx says the attack has affected its financial performance, but it is “still evaluating the financial impact of the attack”, but it is likely it will be material.
“We do not have cyber or other insurance in place that covers this attack. Although we cannot currently quantify the amounts, we have experienced loss of revenue due to decreased volumes at TNT and incremental costs associated with the implementation of contingency plans and the remediation of affected systems,” the integrator adds.
TNT was heavily affected by the cyber-attack known as Petya, which involved the spread of an information technology virus through a Ukrainian tax software product.
FedEx says the systems and data of all other FedEx companies are unaffected and TNT operates in Ukraine and uses the software that was compromised, and allowed the virus to infiltrate TNT systems and encrypt its data.
While TNT operations and communications were significantly affected, no data breach or data loss to third parties is known to have occurred.
FedEx explains it implemented contingency plans immediately following the attack to recover TNT operations and communications systems and says all TNT depots, hubs and facilities are operational and most TNT services are available.
However, customers are still experiencing widespread service and invoicing delays, and manual processes are being used to facilitate a significant portion of TNT operations and customer service functions.
FedEx says: “We cannot estimate when TNT services will be fully restored. Contingency plans that make use of both FedEx Express and TNT networks remain in place to minimise the impacts to customers.
“Our information technology teams have been focused on the recovery of critical systems and continue to make progress in resuming full services and restoring critical systems. We are currently focused on restoring remaining operational systems, along with finance, back-office and secondary business systems.
“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 says in addition to financial consequences, the cyber-attack may materially impact disclosure controls and procedures and internal control over financial reporting in future periods.
FedEx also filed its annual report on Form 10-K for fiscal year 2017 with the Securities and Exchange Commission and says it will improve the operating income at the FedEx Express Group by $1.2 billion to $1.5 billion in fiscal 2020 versus fiscal 2017, assuming moderate economic growth and current accounting and tax rules.
