Operations of FedEx Corp.’s European subsidiary TNT Express have been affected by a cyberattack that is wreaking havoc with computer networks across the globe.
Trading of FedEx shares was halted just before noon Eastern, on the New York Stock Exchange ahead of FedEx releasing the news about the attack. FedEx says only TNT Express was impacted and “all other FedEx companies are unaffected.” Trading resumed at 12:45 p.m. Eastern.
The TNT disruption comes about six weeks after FedEx said it was affected by the “WannaCry” malware that locked up company networks and demanded payment in bitcoin, a digital currency. “Like many other companies, FedEx is experiencing interference with some of our Windows-based systems caused by malware. We are implementing remediation steps as quickly as possible. We regret any inconvenience to our customers,” FedEx said May 12, declining to detail how it was affected.
Wednesday’s attack on TNT Express is part of a larger cyberattack that began in Ukraine and has caused widespread IT outages around the world. Attackers demanded $300 in cryptocurrency to unlock their systems. About 2,000 users had been attacked as of midday Tuesday in North America, according to cybersecurity company Kaspersky Lab analysts.
TNT Express posted the following message on its website Wednesday morning: “Like many other companies and institutions around the world, we are experiencing interference with some of our systems within the TNT network. We are assessing the situation and are implementing remediation steps as quickly as possible. We regret any inconvenience to our customers.”
“Remediation steps and contingency plans are being implemented as quickly as possible,” FedEx said. “TNT Express domestic country and regional network services are largely operational, but slowed. We are also experiencing delays in TNT Express inter-continental services at this time. We are offering a full range of FedEx Express services as alternatives.” FedEx added that the financial impact of the disruption is unclear at this time.
FedEx acquired The Netherlands-based TNT Express for $4.8 billion in a deal that closed in May 2016. Last week, FedEx reported in its Q4 2017 earnings report that its TNT Express segment generated $1.91 billion in revenue in fiscal 2017.
FedEx is the shipping carrier for 15 retailers in the Internet Retailer 2016 Europe 500, which did a combined $27.05 billion in online sales in 2015, and 318 retailers in the Internet Retailer 2017 Top 1000, which did a combined $180.80 billion in online sales in 2016, according to Top500Guide.com.
FedEx’s revenue in fiscal 2017 grew to $60.30 billion, up from $50.40 billion last year. The carrier generated a net profit of $3.00 billion, up 64.8% from $1.82 billion a year ago. Meanwhile, revenue from its FedEx Ground segment, which is where most e-commerce orders are handled, grew to $4.68 billion, up 9.1% from $4.29 billion last year.
After the WannaCry outbreak earlier this year, ransomware is becoming a routine risk for businesses around the world. While banks and retailers have strengthened defenses against certain types of attacks, such as those targeting credit card data, many others are still catching up in building their defenses. However, unlike traditional forms of ransomware, which often provide secure forms of payment in order to release control of networks, the new hack has seemingly concentrated on crippling systems, rather than obtaining a ransom.
Bloomberg News contributed.Favorite