Beware International Shipping & Business Fraud During COVID-19 Crisis

 In business tips, exporters, freight forwarders, Global Business, importers, international business, International Shipping, Maersk, MSC, Supply Chain

cargo ship in water overlooking sunsetThe apparent cyber attack on MSC spotlights the increased risk of fraud, cyber attack, and cargo theft during the COVID-19 pandemic.

In the middle of all this highly increased working remotely because of novel-coronavirus-induced shelter-in-place orders and shutdowns, Mediterranean Shipping Company (MSC) websites and online booking platform went down. Many unconfirmed reports have called the outage a result of cyber attack.

Fortunately, as reported by many outlets, including American Shipper, “The online services of [MSC], the second largest container line in the world, are now back online after an extended outage due to a cyberattack.”

We’ve seen cyber attacks before this pandemic, and with greater clarity about them, given, as Gavin van Marle says in a Loadstar article, “it was unclear whether MSC was the target of the attack or simply collateral damage.” Probably the most notorious cyber attack in the industry happened a few years ago when Maersk was hit by a cyber attack, affecting the world’s largest container line’s operations around the world.

The attack on Maersk made it obvious that no business is invulnerable to these attacks, but that vulnerability is heightened right now.

Increased Risk Due to Challenges from and Focus on Pandemic

A Hellenic Shipping News article warns stakeholders in the international supply chain to be alert, stating, “The current pandemic-induced dislocation and additional logistics challenges simply increase the risk [of fraud].” The article goes on to say, “fraudsters are already exploiting the current COVID-19 situation and users are highly exposed.”

With shipping news headlines like “Unprecedented disruption to supply chain slams US port volumes” from American Shipper and “Pandemic lengthens US truck driver delays, detention” from the Journal of Commerce, it’s obvious that the industry has challenges to focus on well beyond the normal. These additional challenges can make it harder to spot or fight fraud, theft attempts, and cyber attacks or, at the very least, reduce the focus that might normally be put on discovering and foiling these unlawful activities.

For an example of how security or law enforcement might decrease during these difficult times, consider the IMO 2020 situation. The new legislation reducing the allowable CO2 emission from ship fuel was supposed to be the big story this year. While the new rules did go into effect, enforcement of the new rules have dropped in priority, and I would say rightfully so, as health concerns over COVID-19 have taken precedence.

Here’s a blurb from a Hellenic Shipping article about the pandemic masking the true picture of IMO 2020 compliance:

“Three months on and the disruption to international shipping caused by Covid-19 has pushed sulphur cap issues well and truly from the headlines. Regulation 14.1.3 remains in force – however, where Port authorities globally are prioritising health and the movement of freight, enforcement action will perhaps be less of a priority.”

The UK’s Maritime and Coastguard Agency (MCA) recently announced that it was suspending vessel checks for compliance with low sulphur fuel regulations in order to keep freight moving, although it made clear that it will still inspect vessels where information is received indicating that an inspection would be appropriate.

Specific Supply Chain & Shipping Threats & Tips to Protect Your Business

Of course, that’s not to say there has been absolutely no enforcement of IMO 2020. We blogged recently about MSC being the first major ocean freight carrier to run afoul of the new regulation and raised questions about the enforcement measures taken on the infringement. Likewise, companies are not losing all sight of security because of the extra challenges faced during this pandemic.

However, this is a moment that fraudsters are likely to take as much advantage of as they possibly can. The first Hellenic Shipping News article mentioned in this post brings up fraudulent activity shippers and supply chain companies should be especially aware of. Those activities are:

  • Mandate fraud
  • CEO fraud
  • Round the corner theft
  • Cargo theft
  • Procurement fraud

I recently had someone attempt CEO fraud on me, contacting me via text, claiming to be Universal Cargo CEO Devin Burke. The fraud was easy to detect as it came from a different number than I know to be Mr. Burke’s and I also know how Devin communicates, which is very distinct and often includes the usage of puns. I blocked the number and that was the end of it. However, in a larger company where employees don’t have much or any contact with CEOs, it is conceivable that such a fraudster could trick an employee into believing he or she actually is the CEO and pulling sensitive information out of the employee.

All companies should make sure their employees are educated on how to avoid these frauds and not assume employees will be able to just spot them. Simple tips to teach include making sure employees know that CEOs or employers will only contact them through official means like official company emails or company phone numbers and to make sure they are not being contacted by a similar but slightly different email address or number. If a CEO suddenly contacts an employee he or she would not normally contact, especially asking information about the company, the employee, or company business, that’s a red flag and the identification of the CEO must be verified.

In the past, we’ve posted articles about protecting scams and cargo theft. Here are several:

7 Tips to Beat Cargo Theft by ID Theft Like Tom Brady Beat NFL Suspension

6 Risks in International Trade & How to Manage Them


Shippers Beware: How to Avoid Fake Freight Forwarder Scams


7 Tips to Avoid International Shipping Scams

7 Things Every Shipper Should Know About Peak Season Shipping

In recent years, Universal Cargo has also seen a number of companies and scammers pop up using similar names and logos to ours and even stolen content from our website in attempts to capitalize on Universal Cargo’s well-earned reputation through 30+ years of being a trusted freight forwarder. We saw so much of it, we made a video on the topic:

When Scammers Try to Impersonate Universal Cargo — Universal Shipping News

On a final note, this article should not only be taken as a warning for shippers to remain or be extra vigilant of potential security threats during this pandemic, but it should also serve as a reminder of the importance of cargo insurance, which protects shippers against risks involved with importing and exporting goods.

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