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No Shortcuts to Security

Measuring your threshold for risk has become more complicated than ever. However, industry analysts contend that we need to get better at it because concerns about cyber security, financial malfeasance, political exposure and climate change are here to stay.

By ·

Months before the infamous malware attack known as “Petya” hit Maersk, Fedex and other logistics companies in June, commercial insurer Allianz Global Corporate & Specialty (AGCS) warned logistics and supply chain managers that breaches in cyber security were of utmost concern. As stated in its annual “Safety & Shipping Review 2017,” the threat of cyber attacks continues to be real—and quite significant.

Prior to the Petya event, most violations of proprietary data had been aimed at breaching corporate security rather than taking control of a vessel or plane. Fortunately, the response by a handful of high-tech shipping specialists kept the episode from becoming a global catastro¬phe. For logistic managers, the lesson learned is that mitigating risk in this arena now needs to be a primary and ongoing goal.

“Many more enhancements to existing legacy IT networks are essen¬tial,” says Captain Andrew Kinsey, senior marine risk consultant at AGCS.

Safety-enhancing technology is already making an impact on ship¬ping—from electronic navigational tools to shore-based monitoring of machinery and crew welfare. Technology has the potential to signifi¬cantly reduce both the impact of human error—which AGCS analysis shows accounted for approximately 75% of the value of almost 15,000 marine liability insurance claims over five years, equivalent to more than $1.6 billion—as well as machinery breakdown.

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By ·

Months before the infamous malware attack known as “Petya” hit Maersk, Fedex and other logistics companies in June, commercial insurer Allianz Global Corporate & Specialty (AGCS) warned logistics and supply chain managers that breaches in cyber security were of utmost concern. As stated in its annual “Safety & Shipping Review 2017,” the threat of cyber attacks continues to be real—and quite significant.

Prior to the Petya event, most violations of proprietary data had been aimed at breaching corporate security rather than taking control of a vessel or plane. Fortunately, the response by a handful of high-tech shipping specialists kept the episode from becoming a global catastrophe. For logistic managers, the lesson learned is that mitigating risk in this arena now needs to be a primary and ongoing goal.

“Many more enhancements to existing legacy IT networks are essential,” says Captain Andrew Kinsey, senior marine risk consultant at AGCS.

Safety-enhancing technology is already making an impact on ship¬ping—from electronic navigational tools to shore-based monitoring of machinery and crew welfare. Technology has the potential to significantly reduce both the impact of human error—which AGCS analysis shows accounted for approximately 75% of the value of almost 15,000 marine liability insurance claims over five years, equivalent to more than $1.6 billion—as well as machinery breakdown.

 


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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How Inbound Logistics Networks Can Be a New Source of Savings
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Damco’s Supply Chain Services Under Maersk Banner Will Be Tracked Closely by Managers
Industry analysts have greeted the news with mixed forecasts....