The Rising Significance Of Cybersecurity For Logistics

The direct costs from cybersecurity breaches are growing exponentially, and companies-even small ones-are feeling the need to invest in new systems

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We all read reports about the importance of cyber security and how governments and large organizations are being targeted by hackers to mine crucial data. Even as global businesses are adopting work-from-home on digital platforms to survive in the face of the current crisis, there have been rising instances of cyber-attacks, which are a reminder of the need for a robust cyber-security network. Certain controls and firewalls have already become redundant as they aren't "on premise' and are creating a cyber-security risk unless companies have been agile to incorporate tunnels and VPNs.


A report from Symantec Corp. (now part of Broadcom), published in 2019 stated India is the next most cyber attacked country in the world, after the US and China. During the quarter April-June 2019, India topped the list of countries most cyber attacked, according to a report released by Subex.

A team at IBM has calculated that the average cost of a data breach in India grew 7.29 per cent year-over-year to reach INR 12.8 crore from INR 11.9 crore in 2019. The direct costs from cyber security breaches are growing exponentially, and companies—even small ones—are feeling the need to invest in new systems and a more comprehensive risk management solution. The report also mentioned that among the most commonly targeted sectors in India were critical infrastructure, BFSI, defence and manufacturing.

A new and surprising entrant to this list is logistics and supply chain networks. The 2017 cyber-attack on the Maersk's computer systems brought chaos and mayhem across the globe causing delays across ports of New York, New Jersey, Los Angeles, Europe's Rotterdam, and India's largest container port JNPT. This was the first massive cyber threat to a logistics and supply chain giant and since then, hackers have been actively targeting the sector.

While it is reasonable to assume that these bigger businesses may find themselves vulnerable to cyber attacks, one wouldn't think that medium-sized enterprises would be subjected to such cyber threats. While basic precautions against phishing and malware which come along as standard with anti-virus and firewalls. SMEs and MSMEs fail to invest in advanced security measures against threats such as ransomware remain vulnerable and unprepared.

Data in the supply chain spans from tracking of raw materials to delivery of products to the store or customer, customer information, costs related to transactions which also is the differentiator in how some companies succeed. All this information if not protected could lead to the demise of companies if the malicious intent was to understand the "secret sauce' that has created behemoths today. A company is only as strong as its weakest link.

With increased digitization of the logistics and supply chain companies and introduction of advanced technology enabled solutions, from IoT, cloud computing, AI and data analytics for efficient functioning, the sector is increasingly drawing attention of hackers and potential cyber criminals.

The rising significance of logistics as a vital infrastructure for modern global trade and the accelerated adoption of digitization across the network, make this sector the next potential target to cyber-crimes. Even as India strives to become a manufacturing intensive digital economy, ensuring a secure and well protected cyber space is going to be extremely vital for its growth and success. Hopefully the adoption of blockchain and digital secured contracts could help create transparency and safety in the information supply chain but until the time that is a new norm companies need to re-look at their existing infrastructure and invest with the right guidance on solutions.