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China obtained sensitive F-35 stealth fighter parts after a United Parcel Service (UPS) employee missed an email warning not to route the shipment through Hong Kong, Bloomberg reported, citing a person briefed on the incident.
The email from freight forwarder DSV, working on behalf of F-35 developer Lockheed Martin, said the parts, a cockpit canopy and a weapons-bay door coated in radar-absorbing material, could not transit certain countries under U.S. arms export rules, according to the report.
The incident has triggered Pentagon and State Department investigations and alarmed U.S. lawmakers, as China has for years targeted the F-35, the most expensive U.S. weapons program in history, in espionage efforts.
The shipment was meant to travel to San Francisco via South Korea and Taiwan, but it left Australia late and was mistakenly routed through Hong Kong to speed up delivery, the person said.
The DSV email may have been sent through a different IT system than the one used by the UPS agent, the person added.
The parts came from an Australian military F-35 and were being sent to the U.S. for possible repair or disposal in late May.
Pentagon officials outlined the details in an hour-long briefing on Sept. 29 for staff of the House Foreign Affairs and Armed Services committees.
Erica Plath, deputy assistant secretary of defense for logistics, told attendees her team was taking steps to prevent a repeat.
Lockheed said it had "nothing to add or correct on the series of events you mentioned."
"It's not good the Chinese now have" an F-35 canopy, said Diana Maurer, who oversees F-35 support reviews at the Government Accountability Office (GAO), calling the loss "a big deal."
"I'm sure the Chinese celebrated, and then they got busy trying to reverse engineer it and figure out how to counter it with their own technical capabilities," she said.
Sen. Mark Warner requested the Pentagon briefing, Sen. Tom Cotton has demanded a supply chain review and Sen. Kevin Cramer has asked: "Did China have a plan all along to intercept this?"
The Pentagon has called the parts "unserviceable" and distanced itself from the shipment, with U.S. Transportation Command saying it "was not involved in the transportation or coordination of the shipment in question."
"We are actively working with U.S. authorities and industry partners to retrieve these components, investigate the incident, and place safeguards to avoid a future occurrence," the Defense Department said.
China's Foreign Ministry said last month it was "not aware of the situation," while a Lockheed spokesperson in Australia said the components were "deemed low risk for exploitation."
UPS shares dipped less than 1% after Bloomberg's report on the missing F-35 parts.
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