Crowdstrike Outage & Hodeidah Attack: the Supply Chain is Quickly Disrupted

Last week’s events once again proved how quickly the global supply chain can become unlinked, if only temporarily (this time).  

Container terminals at ports around the world were shut down following the Crowdstrike global IT outage. Some companies operating at these ports were also affected. Oil facilities and a power station near Hodeidah port in Yemen were bombed, sparking fears of additional Houthi rebel attacks in the Red Sea. 

And two large oil tankers collided near Singapore, the world’s biggest refueling port, with one of the vessels behaving in an extremely suspicious manner pre- and post-accident. 

Crowdstrike Bug Temporarily Strikes Down Ports Worldwide

“Planes and cargo are not where they are supposed to be and it will take days or even weeks to fully resolve,” Niall van de Wouw, chief air freight officer at supply chain consulting firm Xeneta, said in a statement shared with CNBC. “This is a reminder of how vulnerable our ocean and air supply chains are to IT failure.” 

The Crowdstrike software bug crashed Microsoft operating systems, causing the largest IT outage in history, and temporarily shutting down ports worldwide. 

While air freight was most impacted, major ports – such as the Port of Houston, Port of New York, Port of Los Angeles, and the Port of Rotterdam – reported temporary disruptions, but quickly resumed normal operations. The Windward Ocean Freight Visibility solution found that no significant shipment delays occurred as a result of the CrowdStrike update, after reviewing shipments entering these ports from July 19. 

Other ports were affected, with The Loadstar noting that the ports of Felixstowe, Tilbury, and Poland’s Baltic Hub (formerly known as DCT Gdansk), all suffered major IT outages. 

2024 has already been a tough year for port congestion, so any disruption could easily cause major issues, according to Emily Stausbøll, Xeneta senior shipping analyst. 

“She noted that in May, Charleston Port on the U.S. East Coast shut for two days due to a software failure, which resulted in a port congestion increase of 200%. ‘Port congestion has been a major problem during 2024. While it is now easing, there is no slack in the system and any disruption will push the needle back into the red,’ she said.” 

More Red Sea Disruptions Coming? 

Strikes targeting oil facilities and a power station occurred near Yemen’s Hodeidah port. Following the fresh attack, Windward’s Maritime AI™ platform has not yet detected any trade flow changes in the Red Sea. 

The million dollar question is whether the world (and supply chain) should brace for retaliatory attacks on ships in the Red Sea/Gulf of Aden. Reuters notes, “The Houthis’ Supreme Political Council said there would be an ‘effective response’ to the strikes.” 

If history is a guide, vessels in the Red Sea and the Gulf of Aden could likely become targets (again). “The (Houthis) began attacking Western ships in the Red Sea and the Gulf of Aden. Their attacks have upended global trade by forcing ship owners to reroute vessels away from the vital Suez Canal shortcut, and drawn retaliatory U.S. and British strikes since February,” notes Reuters. 

Windward has covered the Red Sea crisis extensively and we will continue to monitor the trend of vessels circumnavigating the Cape of Good Hope to avoid potential attacks. And our route deviation alerts help organizations flag route changes caused due to the geopolitical crisis in the Red Sea. 

As Emily from Xeneta was quoted above as saying, any disruption could push the already fragile supply chain into the red. This definitely applies to Houthi disruptions. 

Shady Ship Behavior Near Singapore 

Speaking of being in the red, an article in the Financial Times from two weeks ago noted that port congestion in Singapore was SPIKING and spilling over to other ports:

“Congestion at Singapore’s container port, which is at its worst since the pandemic, has started spilling over to neighboring ports, posing a risk for global supply chains. Shipping rates have risen as much as fivefold over the past year and it is only a matter of time before some of that is passed on to shoppers.” 

The collision between two large oil tankers on Friday (July 19) near Singapore, the world’s biggest refueling port, likely won’t help matters. A Singapore-flagged tanker and the Sao Tome and Principe-flagged tanker Ceres I were about 55 km (34 miles) northeast of the Singaporean island of Pedra Branca on the eastern approach to the Singapore Straits, the Maritime and Port Authority of Singapore (MPA) said.

The very large crude carrier (VLCC) Ceres I is a Chinese-owned tanker flagged as high risk in our system since May 2023. Both vessels caught fire and oil was spotted in the water. The Ceres I had irregular AIS patterns at the time of the collision, as well as multiple times in the past, suggesting possible location (GNSS) manipulation (AIS spoofing).

This is NOT an isolated incident of location (GNSS) manipulation…

There have been 127 oil tankers engaged in AIS spoofing around the world in the past 30 days alone. These vessels are especially dangerous – huge ships carrying enormous amounts of flammable materials and not transmitting their accurate positions while navigating crowded waterways. 

Also, shadow fleet ships are usually older vessels that are not very well maintained, adding to the risk involved. All of these factors pose an extreme risk to both the environment and human life.

The Ceres I apparently vanished after the accident, according to The Maritime Executive: 

“Malaysia confirmed it is now searching for the Chinese-owned tanker and possible additional casualties aboard the vessel. Speaking at a press event on Saturday, Malaysian officials raised numerous concerns about the VLCC Ceres 1, which is registered in São Tomé and Príncipe.

‘So far, Malaysian Maritime has not been able to confirm the actual condition of the ship and crew of MT Ceres 1 since it is not contactable,’ they reported during the briefing.”  

Reuters notes that the Ceres 1 has been involved in shipping sanctioned Iranian oil and is part of the shadow fleet, an issue that Windward closely monitors. 

Windward’s Guidance Remains the Same 

Crowdstrike. Hodeidah port. The Singapore collision. 

Major events seem to be constantly affecting the already-fragile supply chain and logistics sphere. Who was predicting any of these events even two weeks ago? The only constant is change. 

But Windward’s guidance remains the same – because everything can change in an instant, organizations require actionable visibility, shareable shipment capabilities to better communicate with all relevant stakeholders during high stress situations, and a full view of constantly shifting port congestion. 

Being able to detect and track deceptive shipping practices (DSPs) and monitor the shadow fleet is also critical. 

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