Global shipping feels fallout from Maersk cyber attack

U-Ming Marine Transport

29/06/2017 18:48

By Jonathan Saul 
    LONDON, June 29 (Reuters) - Global shipping is still feeling 
the effects of a cyber attack that hit A.P. Moller-Maersk 
 MAERSKb.CO  two days ago, showing the scale of the damage a 
computer virus can unleash on the technology dependent and 
inter-connected industry. 
    About 90 percent of world trade is transported by sea, with 
ships and ports acting as the arteries of the global economy. 
Ports increasingly rely on communications systems to keep 
operations running smoothly, and any IT glitches can create 
major disruptions for complex logistic supply chains. 
    The cyber attack was among the biggest-ever disruptions to 
hit global shipping. Several port terminals run by a Maersk 
division, including in the United States, India, Spain, the 
Netherlands, were still struggling to revert to normal 
operations on Thursday after experiencing massive disruptions.  
    South Florida Container Terminal, for example, said dry 
cargo could not be delivered and no container would be received. 
Anil Diggikar, chairman of JNPT port, near the Indian commercial 
hub of Mumbai, told Reuters that he did not know "when exactly 
the terminal will be running smoothly".  
    His uncertainty was echoed by Maersk itself, which told 
Reuters that a number of IT systems were still shut down and 
that it could not say when normal business operations would be 
resumed.  
    It said it was not able to comment on specific questions 
regarding the breach of its IT systems or the state of its cyber 
security as it had "all available hands focused on practical 
stuff and getting things back to normal".  
    The impact of the attack on the company has reverberated 
across the industry given its position as the world's biggest 
container shipping line and also operator of 76 ports via its 
APM Terminals division.   
    Container ships transport much of the world's consumer goods 
and food, while dry bulk ships haul commodities including coal 
and grain and tankers carry vital oil and gas supplies. 
    "As Maersk is about 18 percent of all container trade, can 
you imagine the panic this must be causing in the logistic chain 
of all those cargo owners all over the world?" said Khalid 
Hashim, managing director of Precious Shipping  PSL.BK , one of 
Thailand's largest dry cargo ship owners.   
    "Right now none of them know where any of their cargoes 
(or)containers are. And this 'black hole' of lack of knowledge 
will continue till Maersk are able to bring back their systems 
on line."  
     
    BACK TO BASICS 
    The computer virus, which researchers are calling GoldenEye 
or Petya, began its spread on Tuesday in Ukraine and affected 
companies in dozens of countries.  urn:newsml:reuters.com:*:nL8N1JO3X6 
    Maersk said the attack had caused outages at its computer 
systems across the world. 
    In an example of the turmoil that ensued, the unloading of 
vessels at the group's Tacoma terminal was severely slowed on 
Tuesday and Wednesday, said Dean McGrath, president of the 
International Longshore and Warehouse Union Local 23 there. 
    The terminal is a key supply line for the delivery of 
domestic goods such as milk and groceries and construction 
materials to Anchorage, Alaska. 
    "They went back to basics and did everything on paper," 
McGrath said.     
    Ong Choo Kiat, President of U-Ming Marine Transport 
 2606.TW , Taiwan's largest dry bulk ship owner, said the fact 
Maersk had been affected rang alarm bells for the whole shipping 
industry as the Danish company was regarded as a leader in IT 
technology.  
    "But they ended up one of the first few casualties. I 
therefore conclude that shipping is lacking behind the other 
industry in term of cyber security," he said.  
    "How long would it takes to catch up? I don't know. But 
recently all owners and operators are definitely more aware of 
the risk of cyber security and beginning to pay more attention 
to it."  
    In a leading transport survey by international law firm 
Norton Rose Fulbright published this week, 87 percent of 
respondents from the shipping industry believed cyber attacks 
would increase over the next five years - a level that was 
higher than counterparts in the aviation, rail and logistics 
industries.  
     
    VULNERABLE 
    Apart from the reliance on computer systems, ships 
themselves are increasingly exposed to interference through 
electronic navigation devices such as the Global Positioning 
System (GPS) and lack the backup systems airliners have to 
prevent crashes, according to cyber security experts. 
    There were no indications that GPS and other electronic 
navigation aids were affected by this week's attack, but 
security specialists say such systems are vulnerable to signal 
loss from deliberate jamming by hackers. 
    Last year, South Korea said hundreds of fishing vessels had 
returned early to port after its GPS signals were jammed by 
North Korea, which denied responsibility. 
    "The Maersk attack raises our awareness of the vulnerability 
of shipping and ports to technological failure," said Professor 
David Last, a previous president of Britain's Royal Institute of 
Navigation. 
    "When GPS fails, ships' captains lose their principal means 
of navigation and much of their communications and computer 
links. They have to slow down and miss port schedules," said 
Last, who is also a strategic advisor to the General Lighthouse 
Authorities of the UK and Ireland. 
    A number of countries including the UK and the United States 
are looking into deploying a radar based back up navigation 
system for ships called eLoran, but this will take time to 
develop.  
    David Nordell, head of strategy and policy for London-based 
think tank, the Centre for Strategic Cyberspace and Security 
Science, said the global shipping and port industries were 
vulnerable to cyber attack, because their operating technologies 
tend to be old. 
    "It's certainly possible to imagine that two container 
ships, or, even worse, oil or gas tankers, could be hacked into 
colliding, resulting in loss of life and cargo, and perhaps 
total loss of the vessels," Nordell said.  
    "Carried out in a strategically sensitive location such as 
the Malacca Straits or the Bosphorus, a collision like this 
could block shipping for enough time to cause serious 
dislocations to trade." 
 
    SECRETIVE INDUSTRY 
    Cyber risks also pose challenges for insurance cover.     
    In a particularly secretive industry, information about the 
nature of cyber attacks is still scarce, which insurance and 
shipping officials say is an obstacle to mitigating the risk, 
which means there are gaps in insurance cover available. 
    "There has been a lot of non-reporting (of breaches) on 
ships, and we're trying efforts where even if there could be 
anonymous reporting on a platform so we can start to get the 
information and the data," said Andrew Kinsey, senior marine 
consultant at insurer Allianz Global Corporate & Specialty. 
    There is also a gap in provision, because most existing 
cyber or hull insurance policies - which insure the ship itself 
- will not cover the risk of a navigation system being jammed or 
physical damage to the ship caused by a hacking attack. 
    "The industry is just waking up to its vulnerability," said 
Colin Gillespie, deputy director of loss prevention with ship 
insurer North.   
    "Perhaps it is time for insurers, reinsurers, ship operators 
and port operators to sit down together and consider these risks 
in detail. A collective response is needed - we are all under 
attack." 
 
 (Additional reporting by Jacob Gronholt-Pedersen in Copenhagen, 
Keith Wallis and Carolyn Cohn in London, Euan Rocha in Mumbai, 
Miyoung Kim in Singapore, Alexander Cornwell in Dubai, Michael 
Hirtzer in Chicago, Noor Zainab Hussain in Bangalore, Adam 
Jourdan and Shanghai newsroom; Editing by Pravin Char) 
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357; Reuters 
Messaging: jonathan.saul.thomsonreuters.com@reuters.net)) 
 
Keywords: CYBER ATTACK/MAERSK