TT Club examines the vulnerability of the marine supply chain to cyber crime

Potential losses are growing in the sector so how can you help your clients battle back?

TT Club examines the vulnerability of the marine supply chain to cyber crime

Insurance News

By Bethan Moorcraft

The international freight supply chain has been vulnerable to cargo theft since its creation. It facilitates the movement of virtually every commodity we ever touch, so by its nature provides rich pickings for thieves.

Until recently, the freight supply chain’s greatest vulnerability to criminal activity was in the final mile delivery stage – from the port of discharge through to the final destination via on-land trucking.

The greatest risk is when cargo is on the move, explained TT Club’s senior loss prevention executive, Michael Yarwood, but there are many simple and effective ways to “tighten the noose” around that problem.

“A lot of risk mitigation in final mile delivery is common sense,” said Yarwood. “Truckers can use physical devices, GPS tracking and alarm systems to keep track of the cargo in their care. Driver awareness and defensive travel strategies are also important. For example, if a driver is hauling a box trailer or container, it’s a good idea to park the truck against something solid to prevent access to the container while stationary.

“Communication, collaboration and knowledge sharing with industry and authority bodies is also a key element to this. The more people who share data around evolving risks, such as vulnerable supply routes and evolving criminal tactics, the easier it will become for the industry to tighten the noose around the cargo theft problem.”

Cyber crime is one such evolving risk that could further expose the vulnerabilities of the international freight supply chain. Few in the industry will be unaware of the NotPetya cyberattack that struck at the end of June 2017 and cost Maersk, one of the world’s largest shipping container businesses, from US$200-300 million in losses.

NotPetya, devastating as it was for Maersk, served to raise awareness of cyber risk in the supply chain. It was purportedly a ransomware attack based around a denial of access to data, which caused business disruption and interruption.

“Disruption is the real threat to the international freight supply chain,” Yarwood told Insurance Business. “Many operations are totally reliant on IT infrastructure and data to run warehouses and terminals, internal databases and customer information systems. Some are so reliant on the benefits these IT systems provide in terms of efficiency, that they perhaps don’t have a manual work around any more and nothing to fall back on in the event of a cyberattack and business disruption. This highlights the need for contingency planning and secure and regular data back-ups.”

Cyber crime could also play a part in the facilitation of physical cargo theft. Social connectivity and the internet has created a new degree of transparency within the supply chain that criminals could exploit.

Access to big data could enable criminals to identify exactly what cargo is being transported in a truck, what route the truck will take and when the cargo will be at certain points. Effectively, cyber criminals could “cherry pick the most vulnerable point in the supply chain” to make their attack, according to Yarwood.

“Organized criminals might be able to start building profiles and models of drivers, who take particular routes and stop at preferred locations,” he commented. “It’s a bit fanciful, but that kind of information is readily accessible on social media and other similar platforms. I think the evolution of cyber crime will lead to a more targeted approach to cargo theft.

“Mitigating that risk takes lots of education and awareness. Drivers need to understand that when they post on social media, they’re offering time-sensitive, location data for organised crime gangs. Something as innocent as posting a picture of your breakfast at a roadside café on Facebook could have very real ramifications.”

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