Securing the Supply Chain: Cyber Security's Importance in Logistics

Summary

Explore the importance of cyber security in logistics, the measures being implemented to combat cyber threats, and the challenges faced by the industry to achieve cyber resilience. In this article, we will explore:

• The Growing Relevance of Cyber Security in Logistics
• The Evolving Cyber Security Landscape
• Mitigating Vulnerabilities in the Data Supply Chain
• The Future of Cyber Security in Logistics

Introduction

Supply chains are the lifeblood of global commerce, weaving together countless threads of production, distribution, and delivery. But as these networks grow more complex, they also become prime targets for cyber threats. Imagine a digital fortress, where every link in the chain is fortified against invisible invaders. This is the new frontier of cyber security in supply chains—a realm where innovation meets vigilance, and where safeguarding data is as crucial as moving goods. Welcome to the age where securing the supply chain is not just a necessity, but a strategic advantage.

Ranked as the sixth most relevant logistics trend, over two-thirds of industry respondents rate cyber security as highly relevant. As digitalisation continues to transform logistics, the industry faces increasing cyber threats that can cause significant financial damage and jeopardise company reputations.

The Growing Relevance of Cyber Security in Logistics

The logistics industry is highly vulnerable to cyber threats because of its vast data volumes, real-time connectivity, and interconnected supply chains. By 2035, it is expected that 45% of supply chains will operate largely autonomously, which will contribute to the vulnerability of the industry.

Over the years, the logistics supply chain has become a lucrative target for malicious cyber attackers. It is estimated that approximately 27 incidents impacted transportation and logistics companies between 1 July, 2023, and 30 July, 2024. For just a glimpse into these types of attacks, see this March 2024 snapshot across all industries, including logistics. Furthermore, researchers at the Stenden University of Applied Sciences in the Netherlands reported that the shipping industry experienced at least 64 cyber attacks in 2023, marking a significant increase from previous years, as noted by the Financial Times. In contrast, the maritime sector faced only three cyber attacks in 2013 and none in 2003.

Security breaches can lead to data compromise, theft of trade secrets or customer information, and operational disruptions. Industry leaders are acutely aware of these risks, as confirmed by recent surveys, and view this topic as increasingly relevant to strategy and operations.

The Evolving Cyber Security Landscape

Cyber security in the logistics market is expected to grow at a 12% compound annual growth rate (CAGR) from 2024 to 2037, from an estimated USD 8.4 billion in 2024 to USD 36.6 billion by the end of 2037. Innovations are constantly in the works, as demonstrated by the amount of patents filed.

Between 2019 and 2023, approximately 5,000 patents related to cyber security were filed in the logistics sector. For instance, the Cybersecurity Assessment and Risk Management Tool patent focuses on identifying the general cyber security posture of an entity, detecting areas for improvement, and providing a lifecycle perspective on cyber security. Although only a small share of these patents is considered “groundbreaking – an invention or innovation that significantly advances technology or industry, often introducing new concepts, methods, or products – the amount of patents filed reflects the maturity of cyber security adaptation within the industry.

In a recent study, mentions of cyber security by C-Suite executives have declined from 150 in 2022 to 90 in 2024. This suggests that cyber security is now viewed as essential business hygiene rather than an innovation, a point repeatedly emphasised by industry leaders.

But why do patents matter? Patents play a significant role in shaping industry standards, especially in fields like cyber security. Here are a few ways:

• Setting Benchmarks: When patented technologies become widely adopted, they often set the benchmark for security practices and protocols. For example, patented encryption algorithms or secure authentication methods can become industry standards, influencing how cyber security solutions are developed and implemented globally.
• Encouraging Innovation: Patents provide a strong incentive for inventors to create new and improved cyber security technologies. This continuous innovation helps raise the overall standard of cyber security practices within the industry.
• Promoting Transparency: The patent system requires inventors to publicly disclose the details of their inventions. This transparency helps spread knowledge and allows other innovators to build upon existing technologies, fostering a cycle of continuous improvement and innovation.
• Strategic Advantage: Businesses can leverage patents to position themselves as leaders in innovation. By actively participating in industry consortia and working groups, companies can contribute to the development and promotion of industry standards.

These factors collectively help shape the cyber security landscape, ensuring that the industry continues to evolve with robust and effective security measures.

Mitigating Vulnerabilities in the Data Supply Chain

The logistics supply chain ecosystem is fraught with vulnerabilities that can be exploited by malicious actors. These vulnerabilities can lead to data breaches, theft of sensitive information, and operational disruptions. According to IBM's latest Cost of a Data Breach Report, the global average cost of a data breach in 2024 was USD 4.88 million, a 10% increase over last year and the highest total ever.

To mitigate these risks, the industry has implemented robust security standards, including layered defences such as advanced encryption and multi-factor authentication. Organisations also conduct regular vulnerability assessments and penetration tests to strengthen their security frameworks.

Businesses should ensure that their integrated logistics partner has a cyber security plan to ensure the security of their supply chain. A plan can have many elements, but the most common ones include:

Advanced Security Measures

To combat cyber threats, logistics companies are adopting advanced digital security measures. These include:

• Advanced Threat Detection: Utilising sophisticated tools to identify and respond to potential threats in real-time.
• Zero-Trust Architecture: Ensuring that every access request is thoroughly verified before permission is granted.
• Next-Generation Firewalls: Deploying advanced firewalls to protect network perimeters.
• Endpoint Protection Solutions: Implementing comprehensive security solutions for all endpoints within the network.

Employee Training and Awareness

Human error remains one of the most significant risks to cyber security. To address this, businesses and logistics companies should conduct periodic training sessions for employees, helping them stay alert to potential threats and adhere to best practices. This training is crucial in fostering a culture of cyber security awareness within the organisation.

As the Cyber Management Alliances points out, “Lately, threats have become harder and harder to recognise — from phishing emails to ransomware disguised as donation drives. Yet, a majority of organisations across the world don’t have well-trained staff or adequate cyber security infrastructure to help protect them from such attacks.” It is crucial for businesses in the supply chain sector, particularly those leading in technology adoption, to invest in cybersecurity training and conduct scenario-based tabletop exercises for incident response plans. Employees, being the first line of defence, must be well-trained.

Cyber security awareness and training should not be a “set and forget solution” for a business. There should be a continuous cycle of training conducted throughout the organisation for end-users, privilege users, and managerial staff. This training should be measured to ensure that the staff was trained on current security trends, securing technology, security labs and exercises, and workforce assessments conducted.

Randy Rose, Senior Director of Security Operations & Intel at the Centre for Internet Security has this to say about employee training: “Maslow must rethink his hierarchy of needs! The internet has firmly rooted itself somewhere near the base of his famous pyramid. And just as we cannot forego using cyberspace, neither can we forego employee security awareness training.” Rose says that, in today's tech-driven world, cyber security training, education, and awareness are crucial for everyone, regardless of their technical skills. People rely on technology daily for work tasks, scheduling, managing finances, helping with children's homework, and making purchases, making it essential to stay vigilant against cyber threats.

“Cyber security education that sticks can be the difference between a user who clicks a link and a user who stops to think. And that difference can save an organisation millions,” says Rose.

Internet of Things (IoT) Integration

The integration of IoT technology in logistics has improved the monitoring of unauthorised access to containers and other assets. IoT devices provide real-time data and alerts, enabling companies to respond promptly to potential security breaches. However, the proliferation of IoT devices also introduces new vulnerabilities that must be managed effectively.

Partner and Supplier Compliance

To reduce vulnerabilities, logistics companies require their partners and suppliers to adhere to strict cyber security protocols. Regular audits ensure compliance with these standards, and all data exchanges with external parties are conducted through secure, encrypted channels. This collaborative approach helps to create a secure supply chain ecosystem.

Real-Time Threat Monitoring and Response

Real-time monitoring systems are essential for detecting and responding to evolving cyber threats. These systems provide continuous surveillance of network activities, enabling companies to identify and mitigate potential threats before they cause significant damage. By investing in real-time monitoring, companies can enhance their ability to respond promptly to cyber incidents.

The Future of Cyber Security in Logistics

Cyber security has a significant impact on logistics, providing essential protection against rapidly evolving risks. Cyber security in logistics is crucial to protect sensitive data, ensure operational integrity, and maintain trust among businesses, integrated logistics partners, and the end customer.

As digitalisation continues to transform the industry, logistics companies must prioritise cyber security to safeguard their operations, data, and reputation. By implementing advanced security measures, conducting regular training, and fostering a culture of cybersecurity awareness, the logistics industry can navigate the challenges of the digital age and continue to thrive in a secure environment.

As the industry evolves, staying ahead of cybersecurity trends and challenges will be crucial for continued success. The integration of advanced technologies and the adoption of comprehensive security strategies will help companies navigate the complex cybersecurity landscape and protect their operations from emerging threats.

Be ready to combat cyber threats to go all the way! Discover more with Maersk Logistics Insights, and learn more about Maersk’s cyber security policy and cyber security certificates. For more logistics trends and insights, read and download The Logistics Trend Map.