Logistics
CYBERCRIME THREATENS SUPPLY CHAIN
February 23, 2015

The TT Club warns that companies in the supply chain sector do not understand their costs and liabilities as cybercrime continues to increase.

It appears that like few other risks, cybercrime knows no bounds; the more you consider it the greater the potential risk exposure appears. From email and communication channels through to fully automated terminal operations, businesses are reliant today on increasingly inter-connected and automated IT solutions. The cyber criminal’s ability to hack into email accounts and communication channels is well-established, so the risks to the logistics operator cannot be ignored.

While technological advances undoubtedly provide greater operational efficiencies, and opportunities for carriers and operators through the supply chain to mitigate their exposure to theft and fraud, unfortunately they equally benefit criminal organizations. As invasive cyber technology becomes more widely available and cost effective, a greater risk to legitimate trade is emerging, exposing operators to both economic and commercial damage.

The effectiveness of business operations is dependent on continuous and secure communications channels to receive and fulfil orders, as well as instruct on-site and remote/mobile personnel. Both interruption to service and infiltration are obvious critical risks.

Criminals have been swift to leverage the capacity of the internet to obscure identity and location in order to carry out crime and espionage.

It is critical that this risk is recognized since it exposes businesses to both loss of reputation as well as industrial espionage. Never underestimate the value of the data your business retains or generates electronically. Whether intellectual property, financial information or your customers’ commercially sensitive data, even what appears to be the most benign information can prove extremely valuable to a criminal organization. Data are everywhere and the lifeblood of most organizations.

The methodology and technology behind crimes are constantly evolving and becoming more sophisticated. Typically, technology considered advanced 12 months ago may today be accessed through a freely-downloadable application. Systematic tracking of individuals, particularly through social media, as well as specific cargo flows, enable criminal organizations to identify the weakest link in the supply chain and strike with minimal risk.

The very nature of the international supply chain in facilitating movements across borders is an ideal partner to fulfil trafficking of people, drugs, and other illegal trades, such as dumping waste, as well as intercepting valuable cargoes. Criminal organizations are known to have employed hackers to facilitate the trafficking of drugs by compromising IT systems at the destination port in order to generate release codes, allowing the subject containers to be collected. TT Club has also highlighted concerns arising from bogus trucking contractors, particularly through cargo clearing sites.

As a result, TT Club urges management boards to carry out thorough risk assessments and consider strengthening their ‘e-perimeter fence,’ as well as ensuring only approved software programmes can be run on systems/networks and educating employees about the risks. As with the physical environment, the human element is a critical strength and weakness. In the electronic environment, this can be reinforced by network monitoring of activity and behaviours, in addition to appropriate segregation and set-up of access rights.

 

By Iain Sharples

TT Club | Sydney

 

 

About the author

Iain Sharples is senior underwriter at TT Club in Sydney.

 

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