The global economy has been racked by a pandemic, a surge of pent-up demand and a labor shortage and has created a breaking point in the market supply chains, causing many shipping companies to feel the strain and by extension the consumers. But in the chaos, there is another hidden danger related to security that could cause the fragile system to collapse.
Fears Justified with Large Scale Breaches in the Past
Logistical companies are among the most valuable targets that hackers can target, up there with medical companies because of the amount of data and cargo they control. Further, logistical companies can cause much more chaos by disrupting an entire supply chain. For example, in 2019, Moller-Maersk, the worlds largest container shipping company, was the most notable victim of a worldwide breach. The company was one of the worse hit of those caught in the crossfire of NotPetya, with almost 50,000 infected endpoints and thousands of applications and servers across 600 sites in 130 countries. This required them to replace 4000 servers and 45000 computers, which took several weeks to bring back online.2
In more recent breaches, the Colonial Pipeline was shut down for a week, causing gas supplies to run out for the Southeast at a time when demand would have been increasing. Meanwhile, the Kaseya hack shut down several store chains, particularly in Sweeden where a chain was forced to close all of their stores for several days because their systems were compromised, and it wasn’t even directly affected.
According to Mike Smith, President and CEO of PL Risk Advisors, Inc. “The supply chain disruption by hackers is the next frontier. As evidenced by both the Colonial Pipeline and the Kaseya breaches, a breach to a small number of companies can lead to an exponential risk of thousands of other companies and individuals.”
Many Companies Are Worried
This is a fear many in the business feel in a recent report by BlueVoyant. In their 2021 Global Insights survey, they asked 1,200 CIOs, CISOs and CPOs responsible for supply chain and risk management. Here are some of the findings:
- 93% of respondents admitted that they have suffered a direct cybersecurity breach because of weaknesses in their supply chain
- 97% have been negatively impacted by a cybersecurity breach that occurred in their supply chain
- The average number of breaches experienced in the last 12 months grew from last year from 2.7 to 3.7 – a 37% year-over-year increase
Even with increased budgets, breaches are still happening according to the report. “Despite substantial budget increases to tackle the problem. As in 2020, 91% say that budget for third-party cyber risk management will be increasing in 2021. Surveyed companies report an almost equal distribution of pain points: managing false positives; managing the volume of data; prioritizing risk; and knowing their own risk position, among others. The fact that companies are reporting so many issues suggests that larger budgets are not yet resulting in sufficient risk reduction. Currently, the treatment is not proportional to the scale of the risk faced and organizations are experiencing frequent breaches as a result.”
With the supply crunch strangling the global economy, the security of logistical networks is key. Supply chain disruptions will continue to wreck havoc on our economy, goods and services. The cyber risk in the supply chain is higher than ever. At Axis Insurance Services we can help you learn what to do. Contact us today: