COVID‑19 strains on global shippers result in even less margin for error when combating ransomware risk

Summary

Some of the world’s largest shippers are facing increasing difficulties in global supply chains amid a disruption in trade caused by the pandemic. A number of factors, including staff illness, quarantining and social distancing coupled with a spike in consumer demand and disruption to factory production has resulted in increasing delays for shippers and in turn their customers.

For example, Honda reported this week that it would be temporarily halting production at its facility in England due to shipping delays that resulted in a shortage of parts for the carmaker. The problem is particularly acute for companies like Honda that use just-in-time delivery systems that means it does not keep local inventory but relies upon the ability to receive parts as they are needed.

Tim Morris, chief executive of U.K. Major Ports Group cited “unprecedented volatility in global supply chains.”

Report

Analysis

COVID‑19 has resulted in less margin for error both operationally and financially for many companies. The current strains on global supply chains are case in point. Meanwhile, 2020 has been marked by a significant spike in ransomware attacks, a threat that has been growing in the maritime sector over the course of this year. MSC and CMA-CGA are two of the most recent examples Cyberhedge has covered.

The systemic challenge posed by the merging of operational technology (OT) and IT places increased onus the ability of companies to manage their digital transformations well and protect against growing downside security risks. Laggards in this realm will continue to be at increased risk of disruptions like those experienced by CMA-CGA and Maersk years earlier. Shareholders will absorb losses due to poor cyber that could otherwise have been avoided if the right investments were made in lowering the risks.

As the case of Honda highlights, it’s of course not only shippers but the companies that rely upon them that face immediate negative financial impacts from disruptions in the supply chain.

At a minimum, investors should also seek answers from the C-suite of global shippers on how the likelihood of ransomware attacks are being minimized. These are disruptions that shippers can ill-afford when already facing enormous operational challenges.

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