A PwC survey highlights
executives’ worries – and urges investment in security.
By Rima Evans
Cyber, hacker, pirate and
terrorist attacks are expected to increase across the global supply chain over
the next 20 years, a report reveals.
And firms are warned they
should plan and invest in security now to protect their assets.
The survey by PricewaterhouseCoopers
(PwC) found that respondents thought there was a 56 per cent probability of a
rise in such attacks. And of the 80 executives questioned from across business,
science and government, most said they were more concerned with hacker attacks
affecting their supply chain than they were physical attacks. In Germany, for
example, research has shown that the internet is attacked every two seconds.
PwC’s report, Volume 4 of the Transport & Logistics’
2030 series: Securing the Supply Chain, carried out with the Supply Chain
Management Institute (SMI) at EBS Business School in Germany, also warns that
cyber attacks are now so sophisticated that any business in any country could
be at risk.
But it’s not just cyber
attacks that firms need to prepare for – there are also natural disasters. Iceland’s
volcanic eruption in 2010, for example, led to the airline industry losing
around $1.7bn in revenue when more than 100,000 flights were cancelled over six
partner and global transportation and logistics industry leader at PwC, said:
“The supply relationships between producers, suppliers and consumers have
become more complex and more accident-sensitive in the last few years. Today,
90 per cent of the worldwide trading volume is concentrating on about 39
gateway regions. If only a single one of these hubs fails, the economic
consequences could be enormous after just a short period of time and affect
most economies around the globe.”
Assaults on certain,
highly-frequented ‘chokepoints’, a geographic bottleneck with only one narrow
transport link across a valley or bridge, are predicted to be potential
targets. Examples of these in global shipping include the Strait of Hormuz in
the Middle East, the Suez Canal in Egypt and the Panama Canal in South America.
Egypt already loses more than $640m each year because shipping companies avoid
passing through the piracy-threatened Gulf of Aden and the Suez Canal.
Ruske said that the
increasing threat of attack will mean a rise in security costs for transport
and logistics companies.
“Capital investment on
security, also on security of IT systems, will be one of the most important
cost drivers of the logistics industry,” he said.
Businesses are urged to
devise and execute contingency plans now as the economic impact of such attacks
could be devastating.
Ruske said: “Enterprises
will have to analyse and counteract every possible scenario of danger to
protect their supply chains. It is not just about prevention, but also about
developing alternatives in case of emergency. Thus, every enterprise should be
prepared to quickly compensate for any drop out of a supplier.”
respondents said there was a 60% probability that modern technology would offer
businesses better protection. Freight screening as well as ‘risk’ profiling of
employees and using trusted shipping operators would help businesses stay ahead
of the hackers, the report added.