Global logistics company Expeditors International warned the cyberattack that hit the company late last month is likely to impact its business and financial results.
“The company expects that the impact of the prior shutdown and the ongoing impacts of the cyberattack will have a material adverse impact on its business, revenues, expenses, results of operations, cash flows and reputation,” Expeditors said in a filing with the Securities and Exchange Commission Wednesday. “At this early stage, the company is unable to estimate the ultimate direct and indirect financial impacts of this cyberattack.”
Seattle-based Expeditors services companies such as The Kooples, Herschel Supply Co. and Fox Racing Inc., offering customs brokerage, order management and helping clients secure air and ocean capacity.
Expeditors was the target of a cyberattack Feb. 20 that forced the company to shut the majority of its operating systems globally as a safety measure immediately following the attack.
The company relied on what it said were backup procedures and on Feb. 28 noted the start of progress in returning the business to normal.
“Our teams continue to work around the clock to deploy robust immediate and longer-term solutions, in keeping with our business continuity plans, to restore our systems as soon as possible,” the company said Monday in its most recent update to customers. “We are now handling shipments and providing services across most products and expanding recovery across our locations.”
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In its SEC filing Expeditors was unable to offer a time for when it thinks operations will fully resume. It also said in a separate SEC filing on Wednesday it had trouble obtaining all of the information necessary to file its annual report since it had to shut down its accounting systems, but it would file within the allotted 15-day grace period.
The origins of the attack remain unknown.
Customers lamented the downed systems online, turning to one another for advice on customs approvals and possible cargo re-routing.
The situation turned the head of Ryan Petersen, founder and CEO of digital freight forwarder Flexport. Petersen criticized the lack of attention on the duration of the downed systems saying six days after the incident, “The cyberattack that has rendered the largest international logistics company in the U.S. totally non-operational since last Sunday seems under-reported.”
Shares of Expeditors, with a market cap of about $17 billion, closed down 1.7 percent to $101.41 on Thursday.
The company ended last year with net earnings of $1.4 billion on revenue of $16.5 billion as it worked to help customers get their goods, particularly in routes from China to the U.S. Ballooning rates and import demand have also helped the company’s more recent strong financial results.
“Our strong operating efficiency is a credit to the strength and resilience of our workforce, as our employees have been successfully able to secure the capacity needed to service our customers in these difficult conditions,” chief financial officer Bradley Powell said at the time of the company’s fourth-quarter earnings results. “While this has helped us produce strong financial results, we caution that should demand and rates return to pre-pandemic levels—whenever that may be—our revenues, expenses and operating income are likely to decline from the all-time highs that we experienced in 2021.”