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Freight Forwarding Weekly: Hackers incentivized to target shipping 💾

Welcome back to Freight Forwarding Weekly! 

For shippers, by a shipping container (and a human named Michael). We want to thank you for your ongoing support of our newsletter.

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📈 BY THE NUMBERS: Important numbers impacting freight and logistics

⛽ Diesel: $4.596 / gal

Compared to a year ago, the average per-gallon price of diesel is up by $0.970. Data via the U.S. Energy Information Administration ‚Äď Week of Dec. 19. Diesel prices continue to slide for the sixth consecutive week, per the Energy Information Administration‚Äôs latest round of data.

✈️ Air Cargo Index: 192.4 🔽 (November, FRED)

🚢 Global Container Index: $2,127 (Dec. 16)

🌐TOP STORY: Hackers incentivized to target shipping

Cybersecurity researchers have warned that commercial maritime is at serious risk of being targeted by malicious hackers. In a recent column, researchers Sallay and Hamill-Stewart pointed to the Ever Given crisis, which blocked trade through the Suez Canal, which is a conduit for ~12% of all global trade. While the incident wasn’t a cyberattack, it demonstrated to the world that a potential crisis following a cyberattack could have much wider implications for global trade, supply chains, and globalization.

Attackers have identified opportunities to capitalize on supply chain disruptions caused by potential attacks targeting shipboard systems. With these supply chain disruptions, price dislocations will occur that will carry significant aftershocks throughout the financial markets and companies traded on those markets.

Further, the authors point out that hackers are now aware that they can profit indirectly from financial market dislocations caused by their attacks. The trade stoppage that occurred during the Ever Given crisis resulted in $400 million in losses every hour it continued. According to the researchers, this justifies in the minds of the attackers the ability to manipulate financial markets impacted by cyberattacks as a means to profit. ‚ÄúThey could invest in certain commodities and avoid being tracked as they might with ransomware requests. Attackers could use viruses tested onshore to target vessels‚Äô systems.‚ÄĚ

The moral of the story here is simple: since shipping has such a dynamic impact on the global economy, any sort of interruption to that system ‚Äď e.g., a war, diplomatic crisis, cyberattacks, tariffs, natural disasters, or other events ‚Äď could cost literally billions and could take many, many months, if not years, to recover from.

Full column at The Maritime Executive.

📺WATCH: How a rail strike would impact Chicago and the United States

Chicago is the busiest hub in all of North America for ground freight and passenger rail. Class I rail carriers operate several lines through the area, with a significant contribution to the economy from industries that would be heavily impacted by the potential ripple effects of any interruption of the supply chain. The United States narrowly avoided a major labor strike among rail union workers who were unable to agree on a collective agreement that was brokered earlier this year by the Biden administration.

Watch at The Wall Street Journal’s website.

🆕South African government wants to launch a new flag ocean carrier

South Africa is the only country in the BRICS trade bloc that doesn’t have a national shipping line. The government of South Africa released its plan to establish the South African Shipping Company as a measure to counter ocean carrier and supply-chain risks and to remain competitive with other BRICS members. News24 recently published a very insightful explainer on the launch.

Read more: News24, The Maritime Executive.

🙊 MSC responds to cocaine smuggling allegations

Bloomberg Businessweek recently published an investigative article discussing the alleged infiltration of a ship owned by MSC Mediterranean Shipping Company by a complex and secretive cocaine smuggling ring. MSC is one of the world’s largest ocean carriers. In 2019, the United States government seized a record-setting amount of cocaine at the Port of Philadelphia. Law enforcement seized 18 metric tons of cocaine, valued at over $1 billion, reportedly hauled by Liberian flagged container ship MSC Gayane. The article alleges that the MSC is rife with systematic corruption, having been infiltrated by an international cocaine smuggling cartel.

MSC released a statement saying that Bloomberg got it wrong. ‚ÄúMost of the elements in the Bloomberg story have already been publicly reported during the 3 ¬Ĺ years since the Gayane incident and MSC‚Äôs Victim Impact Statement related to the incident is filed in court,‚ÄĚ the company said in a press statement.

Read the Bloomberg story (paywall) here. GCaptain has unblocked coverage here.

⚠️ A few more stories from the world of freight & logistics‚Ķ

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The current edition of our newsletter was written by Michael M., Freight Forwarding Weekly’s chief news analyst. Do you have a tip or do you want us to cover something?