[190717.EN.BIZ] FedEx's TNT Uninsured For Costly Damage in Data Destroying Cyber Attack

THE impact from the cyberattack on TNT Express has turned out to be far greater than estimated, says its Memphis-based parent company FedEx, reports New York's Air Cargo World.

"We do not have cyber or other insurance in place that covers this," said the Memphis-based parent company FedEx.

"Although we cannot currently quantify 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," said a FedEx statement to the New York Stock Exchange.

With many offices reduced to pen-and-paper operations, critical business data appears to have been permanently destroyed, according to a 10-K filing by FedEx, to the US Securities and Exchange Commission (SEC).

The virus first struck the company's Ukraine operations on June 27, before infiltrating the company's global network, the filing said.

The cyber-attack that shut down TNT Express operations late last month is still impeding the company's operations.

"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 said. "We cannot estimate when TNT services will be fully restored."

FedEx information technology teams are currently working to recover critical data. However, in the days that followed the attack, it emerged that the virus, known as Petya, was a "wiper," not ransomware.

That means that the virus was designed to destroy data, rather than restore data once the ransom is paid.

"We are currently focused on restoring remaining operational systems, along with finance, back-office and secondary business systems," FedEx said.

The express company said that there was no timeframe for full restoration of impacted systems, and that it might never fully recover critical business data that was encrypted by the virus.

"We are still evaluating the financial impact of the attack, but it is likely that it will be material," FedEx said.

TNT services are available, but 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 said it could not estimate when services would be fully restored but contingency plans that make use of both FedEx and TNT networks remain in place to minimise the impact to customers.

The company said its IT teams have been focused on the recovery of critical systems and continue to make progress in resuming full services.

Source : HKSG.