Cybersecurity 2.0

Trend Overview

Impact:

Moderate

Realization:

< 5 Years

Focus Areas:

Physical & Digital Security Visibility & Resilience

Trend Clusters:

Digital Backbone

Sectors:

The trend of Cybersecurity 2.0 encompasses the next generation of solutions, processes, and standard operating rules and regulations that leverage artificial intelligence (AI) and other advanced technologies and ways of working to protect critical systems, sensitive information, and devices against cyberthreats. It involves protection, detection, and response tools that not only prevent attacks but also actively predict and autonomously detect threats and respond to attacks.

Significant developments in collaborative online platforms, the rising number of Internet of Things (IoT) devices, and acceleration towards digitalized operations using cloud-based servers and digital processes have led to an increase in cyberattacks. As this type of crime grows in volume and sophistication, companies have increased their security budgets and adopted more advanced systems of defense. However, keeping up with the number and severity of threats continues to be a challenge. Studies show in 2021 the average number of cyberattacks and data breaches on 1,200 organizations across 13 industries and public sectors increased by 15.1% from the previous year. A quarter of all respondents additionally conveyed that the merging of digital and physical systems, as seen in IoT devices, increases their risk of threat. Reflectively, a Fortune Business Insights report shows the projected market value increase in cybersecurity reaching 376.32 billion USD by 2029, from 139.77 billion USD in 2021 at a CAGR of 13.4%.

In the logistics industry, publicly known cybercrime assaults used to occur only every few years. More recently, it seems one or two are happening every month. In May 2021, a cyberattack successfully shut down the largest pipeline system for refined oil products in the US, the Colonial Pipeline, disrupting the supply of energy to approximately half of the US east coast for about a week, costing the corporation upwards of 50 million USD.

With such an increase in incidents, paired with the negative impact of cyberattacks on global supply chains, this trend requires new levels of resilience and more focus and prioritization to ensure proactive defenses as the digital backbone of the organization.

Types of attack on the logistics industry.

Source: Hornet Security

Relevance to the Future of Logistics

Rise of Cybercrime in Logistics

The logistics industry has been identified among the top 10 impacted sectors worldwide, as it is one of the world’s largest revenue-generating industries and is increasingly targeted by hacker attacks via phishing emails, ransomware, and more. While digitalization brings advantages, the dynamic transformation of systems can leave some security factors unconsidered. Outdated servers, unpatched systems, and knowledge gaps between employees equate to cracks in the IT infrastructure which provide loopholes for cyberattack. As this applies to all aspects of the industry, including maritime, rail, trucking, supply chain, and last-mile delivery, the potential expense of this risk is high and can disrupt global supplies, while also introducing additional liabilities like the theft of sensitive customer data during a cyberattack.

Massive losses are incurred by owners when ransomware cyberattacks compromise system access. In 2020, the average cost of a security breach was 3.86 million USD. With a projected increase by 2025 to 10.5 trillion USD by 2025, this trend is clearly on the rise. Cybersecurity 2.0 solutions, processes, rules, and regulations will help companies protect themselves from such losses, while also protecting their brand and customer base.

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Anticipation & Resilience

While digitalization and new technology create business efficiencies, the growth of e-commerce platforms, as well as the masses of data being stored in the cloud, drives an increasing need for cybersecurity. Anticipating cyberattacks on these platforms not only secures suppliers but also the private data of their customers. Although logistics and the supply chain continue to operate in a very hands-on manner through the physical movement of products, this requires a significant volume of data processing and information sharing along the supply chain. The typically disparate network of parties involved in the supply chain creates more ways for would-be attackers to identify weak links in cybersecurity.

It is vitally important for logistics companies to increase cybercrime resilience by implementing digital backbones and staying up to date with the cyberthreat landscape. The impact of IT system vulnerabilities on business processes, products, employees, and customers alike must be constantly monitored in order to preserve the value chain, keep the global supply chain moving, and ensure a position of cyber resilience.

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Digital Security in Operations

As intelligent security expands in operations through the adoption of technologies such as computer vision, IoT devices, and AI-powered autonomous surveillance systems, so too does the possibility for cyberattack, and the level of risk increases when these technologies are deployed in cloud-based solutions which capture data on employees in logistics operations as well as data on customers. Privacy protection has therefore become one of the most pressing issues for supply chain organizations; the importance of safeguarding employee and customer data can occasionally outweigh the importance of the shipments themselves.

Implementing new cybersecurity solutions and increasing the robustness of existing solutions using blockchain technology can add layers of security to combat potential threats. Failure to do this would risk major disturbance and disruption in the global supply chain network. Physical operational security can also be enabled through computer vision technologies to identify in-facility threats so long as the organization takes adequate cybersecurity steps to protect sensitive operational information from hackers.

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Challenges

Legacy infrastructures in logistics operations may be relatively unsophisticated which prevents integration of the latest cybersecurity features; the organization must allocate sufficient budget to ensure robust operation and cyber resilience.

Only as strong as its weakest link, the organization must dedicate resources to proactively train and inform employees about cybercrime and how to remain alert to potential threats; special exercises may be necessary, for example sporadically imitating phishing attempts.

Challenge 1 Challenge 2

This trend should be ACTIVELY monitored, with imminent developments and applications.

Outlook

The logistics industry has been cautiously advancing towards widespread adoption of newly emerging technologies, as any logistics or supply chain disruption or network outage can have global impact. Robust and collaboratively tested technologies that do not cause vulnerabilities to the IT infrastructure and network are incorporated and implemented to improve operations and efficiency. However, cybersecurity must remain at the forefront of strategic decision making to ensure each organization maintains high safety standards across the logistics industry.

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Sources

Forbes (2022): Alarming cyber statistics for mid-year 2022 that you need to know
ResearchGate (2022): Cyber security in the logistics industry
American Global Logistics (2022): Cybersecurity breaches stand to disrupt supply chain operations in 2022
Cyber Protection Magazine (2022): Cyber resilience for transport and logistic supply chain

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