Fedex was one of the companies that announced last month that they were affected by the Petya un-ransomware (it operated like ransomware, but there was no decryption key, even if you paid the ransom).
It is interesting that most of the time there is some sort of malware attack you do not get much information, but with this incident, we are seeing a lot of information.
In this case, the attack, which happened over a month ago, affected Fedex’s TNT Express unit. TNT operates in over 200 countries and had revenue of over $8 billion.
Fedex says that the attack will hurt it’s full year results and will be material. For Fedex, at over $50 billion in revenue, to say the effects of a cyber attack will be material to it’s full year financial results is pretty unusual.
Over a month later, TNT is still experiencing widespread service delays and that it is experiencing a revenue drop and costs associated with dealing with the malware.
Even more amazing, Fedex did not have cyber risk insurance in place to cover the cost of the incident, they say.
They also say that they are still evaluating the financial impact of the attack and have no estimate as to when service at TNT would be back to normal.
Let me see if I can summarize this:
- a $50 billion company says that the effects of a ransomware attack will be material to their full year financial results
- Six weeks after the attack they are still experiencing widespread service delays
- They do not know when service will be back to normal
- And, they had no insurance to cover the incident
I seriously doubt that this will have any long financial effect for Fedex, but I am sure that their corporate ego is seriously bruised. I anticipate that many of the customers that moved to other carriers like DHL and UPS after the service disruption will never come back to Fedex.
Ponder this one for a moment.
If YOUR company suffered ransomware attack like Fedex did, how long would it take you to recover? How many customers would you lose? Could you afford the cost of the event or would it be life altering to the company?
The good news for Fedex is that even if it costs them $10 million , $100 million or even $500 million, they will be able to weather the storm.
Would YOUR company be able to say the same?
Information for this post came from Reuters.