Aon
Aon
Top Risks Facing Transportation and Logistics Organisations
This article first appeared in the Railway-News Magazine Issue 4 2024.
Transportation and logistics industry respondents to our Global Risk Management Survey (GRMS) ranked cyber attack or data breach and economic slowdown or slow recovery as their two most critical risks.
One continually evolving risk is cyber attack or data breach, which is the top-ranked risk for the industry in our 2023 survey. Other risks don’t appear on the top 10 list but are intimately connected to cyber risk, including disruptive technologies such as artificial intelligence (AI) and quantum technologies, which have the potential to amplify these risks and bring about more regulatory or legislative changes. Geopolitical risk could cause business interruptions and property damage.
The list goes on. The industry will need to continue to develop new strategies to address the fast-evolving risks that are on its doorstep as well as any new risks that are approaching. Resilience – not to mention significant value – is at stake.
Current Risks
Some of the most notable risks for the transportation and logistics industry can cause significant disruptions. A few overlooked vulnerabilities can accumulate to cause immense systemic damage. Cyber attack or data breach is already the top risk for the industry according to respondents, but an organisation’s cyber vulnerability should receive more attention and support from C-suite decision-makers as well as more collaboration between HR, risk and IT to create a whole-enterprise approach. Consider uninsured warehouse liability risks that may result from a cyber event. Many in the industry hold liability coverages that exclude losses that result from cyber events, but many warehouses still have elements in their software systems that are vulnerable to bad actors, and the uninsured losses for the industry could run into the billions. Elsewhere, hidden liabilities in shipping contracts are often not quantified or are underexamined, but they can cause very significant financial damage.
