Impact Of COVID-19, Crew And Congestion On The Shipping Industry (2)

June 10, 2022 Maritime Safety News

COVID-19 measures in China, a surge in consumer demand and the invasion of Ukraine have all been factors in ongoing unprecedented port congestion.

Congestion at the US ports of Los Angeles and Long Beach reached record levels in November 2021, with 116 container ships either in port or at anchor, while in March 2022, Los Angeles recorded its third-busiest month ever [10] as work continued to clear marine terminals of cargo and reduce the number of ships waiting at sea. At the same time, repeated outbreaks in China, resulting in the staggered lockdown of Shanghai in March/April 2022 for example, and Russia’s invasion of Ukraine is compounding ongoing supply/ demand pressures for shipping, which have resulted in port congestion, higher freight fees and longer transit times. Overall, port congestion globally is running above the levels seen last year, with specific container fleet congestion trending towards previous highs, Clarksons Research [11] noted in March 2022, while the impacts of the invasion are likely to create further inefficiencies across the maritime transport system.

Port congestion puts crews, port handlers and facilities under additional pressure, increasing risk at a critical stage of a ship’s journey, according to Captain Anastasios Leonburg, Senior Marine Risk Consultant at AGCS.

“Loading and unloading vessels is a particularly risky operation, where small mistakes can have big consequences,” says Leonburg. “Busy container ports have little space while the experienced labor required to handle the containers properly is in short supply. When you add in fast turnaround times and port congestion, this may result in a significantly heightened risk environment.”

Port risks are already increasing with larger ships, which concentrates large volumes of trade into the fewer larger ports that have specialist infrastructure. Accumulations of cargo exposures at mega ports have been rising, while commercial pressures increase the risks of mistakes and accidents. Ports are also increasingly reliant on technology, where an outage or cyber-attack could effectively close a port.

“Commercial pressures are already a contributing factor in many losses that resulted from poor decision-making,” says Captain Nitin Chopra, Senior Marine Risk Consultant at AGCS. “The pressure on vessels and crew is currently very high. The reality is that some may be tempted to ignore issues or take shortcuts, which could result in future losses.”

AGCS analysis shows that 75% of shipping incidents involve human error.

Ports and shipping face heightened cyber threat

As geopolitical risks rise, so does the prospect of malicious digital disruption.

The shipping industry continues to fall victim to cyber-attacks. In February 2022, a container terminal at Jawaharlal Nehru Port Trust, India’s busiest container port [12], was hit by a ransomware attack. It is just the latest to be affected, following ransomware incidents at US and South African ports in recent years. Earlier this year, a number of European oil terminals were also affected by a cyber-attack.

Cyber criminals have also targeted shipping and logistics companies. US-based freight forwarder Expeditors was hacked in February, 2022 [13], while Hellmann Worldwide Logistics [14] suffered a ransomware attack in December last year that disrupted operations for weeks. In recent years, some of the world’s largest shipping companies – Maersk, Mediterranean Shipping Company, COSCO and CMA CGM have all been targeted.

According to a recent industry survey [15] just under half (44%) of maritime professionals reported that their organization has been the subject of a cyber-attack in the last three years. Of these, 3% agreed to pay a ransom, which averaged at around $3mn. It also found 32% of organizations do not conduct regular cyber security training while 38% do not have a cyber-response plan.

“Cyber risk is a major concern and we do see more and more incidents involving non-marine operations, such as ports,” says Régis Broudin, Global Head of Marine Claims at AGCS. “As the industry becomes more reliant on technology and automation, the potential for disruption from a cyber-attack or technical failure increases. And with the increased connectivity of ships, it is only a matter of time before it will also affect vessels.”

Security agencies have warned of a heightened cyber risk due to the conflict in Ukraine. NATO warned vessels in the Black Sea faced the threat of GPS jamming, Automatic Identification System (AIS) spoofing (prior to the Ukraine invasion there had already been a number of these incidents, reported in the Middle East and China), communications jamming and electronic interference. The US Cybersecurity and Infrastructure Security Agency also warned the maritime transportation sector could be a target for foreign adversaries.

“There is concern that shipping assets and ports could become collateral damage if the conflict in Ukraine results in an increase in cyber activity,” says Captain Rahul Khanna, Global Head of Marine Risk Consulting, AGCS.


BY Lesiba Sethoga


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