NetworkTigers discusses the rise in shipping industry cyberattacks.
Shifting tides, demanding timetables and global supply chain breakdowns aren’t the only hurdles the shipping industry faces. According to a new global industry study, the average cost of cyberattacks in the logistics and fulfillment industries has risen dramatically over the last 18 months. Not only are shipping firms forced to pay dramatically high ransoms in high-profile cyber attacks, but the frequency of ransomware attacks leading to payouts has also seen a shocking 350% increase.
Understanding maritime cyber risk
According to data analysts, Logistics and fulfillment are particularly prone to cyber risk because the field is inherently interconnected via networks. Supply chains are just that – chains and connections that bring goods and services from one place to another. With every link in the chain comes another possible entry point for cybercriminals.
Connectivity is especially crucial in the maritime shipping industry, which is increasingly reliant on weather predictions, far-reaching data networks, and advanced satellite communications. Former United States Cyber Security Center director Rod Beckstrom explained the phenomenon as “everything attached to a network can be hacked; everything is being attached to networks. Therefore, everything is vulnerable.” According to an industry study, “ships are becoming part of complex nodes on global business networks, and their reliance on connectivity and digitalization is growing.” Because of this, the maritime cyber risk cannot be understated. Maritime cyber risk refers to the potential for cyber attacks such as ransomware to disrupt, corrupt, steal, or compromise shipping-related operational, safety, or security measures. The Maritime Safety Committee, part of the International Maritime Organization (IMO), has adopted specific safety recommendations as part of its Resolution MSC.428(98) – Maritime Cyber Risk Management in Safety Management Systems. They may need further amendments in light of many recent high-profile attacks.
Ransomware used for shipping industry cyberattacks
The average cost of a hack in the shipping industry has risen by 200% over a period of 18 months, a global industry report from CyberOwl, Thetius and HFW warns. The average cost per data breach has reached over $545,000 for a shipping organization. Additionally, 23% of respondents in the field admitted that they had been tricked into transferring funds.
Ransomware is among the most effective and dangerous cybercrimes affecting the shipping industry today. Shipping organizations have seen the average cost of a ransom payment skyrocket in recent years as hackers demand higher prices in exchange for the return of valuable data or system processing capabilities. Companies currently pay an average of $3.2 million in ransom from cybercrime in the shipping industry.
Ransomware attacks in shipping have also become more common, as well as more expensive. Since 2022, the frequency of ransom payouts has risen by more than 350% in the shipping industry.
Recent notable cyberattacks in the shipping industry
- HMM: In 2021, the South Korean shipping group weathered an attack that targeted its email communication systems.
- K-Line: One of Japan’s oldest and largest shipping companies has been hit by multiple attacks involving malware infection and the leak and publishing of data acquired from an overseas subsidiary.
- Transnet: The Transnet attack hijacked major South African container terminals, causing significant delays and reduced capacity by 90%.
- Maersk: The NotPetya destructive ransomware hack caused about $10 billion in damages to countless companies, including national interests such as the radiation monitoring system at Chernobyl. Shipping line Maersk was one of the main entities that took heavy fire from the backdoor exploited by Sandworm.
- MSC: Mediterranean Shipping Company confirmed the hack that took down their website for several days was due to malware and shared the details with industry partners to prevent further similar attacks.
- CMA CGM: The French shipping company faced hackers who claimed to have stolen data concerning half a million of the carrier’s customers. This was the second time in a year that a similar breach allegedly occurred for the company.
Rise in cybersecurity investment to match rise in risk
A study from industry risk assessment advisor DNV illuminated that 87% of maritime professionals believe that the future of their field relies on significant increases in connected networks. Meanwhile, 90% believe severe disruptions to fleets caused by cyberattacks are likely. These two concepts contradict each other, and considerable investment is necessary to confront these industry concerns.
At the same time, 42% of shipping industry respondents report “significant uncertainty” around their insurance coverage for cybercrime, saying that they are unclear about whether or not their company has insurance coverage. Another 25% believe that their company operates without a cybercrime insurance policy.
With all that being said, both awareness and investment are steadily increasing. Only 33% of shipping organizations report spending less than $100,000 on cyber management, down from 54% in 2022. Risk management, IT management, and fleet safety management have all seen significant advances and reprioritization in the wake of increased attacks. Furthermore, Gideon Lenkey, a cyber-security specialist from EPSCO-Ra Security Systems, reports that almost all of the major attacks on the shipping industry do have one thing in common: that the hacked company “did not have multifactored defenses all the way through their systems.” A corresponding rise in MFA logins and authentications could be the silver bullet the industry needs to address at least some rising concerns in shipping and supply chain hacks.
