The Global Shipping Industry: One Week, Two Cyberattacks
In a world where technology rules, dated systems need to adapt to the ever-growing threat of cybercriminals. Unfortunately, the global shipping industry features those very systems and has, as a result, faced two cyberattacks in one week. The second, which hit just days ago, is causing concern about the potential disruptions that it could cause to supply chains that are already, courtesy of COVID-19, struggling to meet the demand of hungry consumers in peak season.
The International Maritime Organisation (IMO), a United Nations agency that serves as the industry’s regulatory body, said in a statement on Thursday that it has suffered “a sophisticated cyberattack against the organisation’s IT systems.” The attack took down the IMO website and all of its internal web-based services in one fell swoop, but their technicians were able to “shut down key systems to prevent further damage from the attack.”
The attack was reported soon after CMA CGM S.A, a leading French container transportation and shipping company, ranked as the worlds fourth-biggest container liner by capacity, announced that its own systems had been compromised. The company spokespeople have stated that their global offices are “gradually being reconnected to the network, thus improving the bookings’ and documentation’s processing times.”
“We suspect a data breach and are doing everything possible to assess its potential volume and nature,” the company said in a statement sent to major publications via email.
It has to be said that, prominent and troubling as these few incidents have been across the past couple of weeks, they aren’t out of the blue. There has been a rash of cyber incidents across the shipping industry for years, and they’ve been increasingly damaging. Back in 2017, A.P. Moller-Maersk A/S, another “top 5” ranking logistics company suffered an attack that cost them approximately US$300mn.
The Maersk incident “has clearly drawn the attention of scammers and cybercriminals who realised that the shipping industry is acutely exposed,” said Ken Munro, a security specialist at Pen Test Partners, a maritime industry cybersecurity company. “If shore-based systems aren’t available to book containers, ships can’t load and can’t generate revenue. Targeted attacks against shipping lines are therefore lucrative for ransomware operators.
At this point, experts can’t predict whether the recent attacks will be a temporary stain on the global shipping supply chain, or whether it’ll have extensive damage further down the line, but Bloomberg Intelligence’s logistic specialist, Lee Klaskow, has suggested that cyber threats, in general, are a “near-term headwind and headache for sure.”
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.