cyber attack

Recent cyber attack has cost Maersk

The shipping company has revealed that the cyber attack has cost $300 million in lost revenue.  

Maersk CEO Soren Skou said “In the last week of the 2nd quarter we were hit by a cyber-attack, which mainly impacted Maersk Line, APM Terminals and Damco. Business volumes were negatively affected for a couple of weeks in July and as a consequence, our Q3 results will be impacted. We expect that the cyber-attack will impact results negatively by USD 200-300m.”

The announcement that Maersk had been hit by an attack, named NotPatya, came towards the end of June.  The attack meant that workers were not able to access any systems unless they paid 300 million in bitcoin, and took two weeks to fix, in which time affected terminals could not move any cargo.

According to their interim report, as soon as A.P. Moller – Maersk became aware that systems had been affected, action to respond was initiated including closing down infected networks. The malware was contained to only impact the container related businesses of A.P. Moller – Maersk, and therefore six out of nine businesses, including all Energy businesses, could uphold normal operations. A.P. Moller – Maersk also remained in full control of all vessels throughout the situation, and all employees were safe. For Maersk Line, APM Terminals and Damco, systems had to be shut down for a period for precautionary measures, as they have global interfaces across businesses and partners.

These system shutdowns resulted in significant business interruption during the shutdown period, with limited financial impact in Q2, while the impact in Q3 is larger, due to temporary lost revenue in July. While the businesses were significantly affected by this cyber-attack, no data breach or data loss to third-parties has occurred.

The attack was contained on Wednesday 28 June and so began the technical recovery plan with key IT partners and global cyber security agencies. On Thursday 29 June, Maersk Line was able to accept bookings from customers with existing accounts and gradually progressed to more normalised operations for Maersk Line, Damco and APM Terminals during the week of 3 July to 9 July.

The report continued saying that this cyber-attack was a previously unseen type of malware, and updates and patches applied to both the Windows systems and antivirus were not an effective protection in this case. In response to this new type of malware,  different and further protective measures have been put in place.

However, the attack doesn’t seem to have had a negative affect on overall profit predictions. According to Skou  “Maersk Line is again profitable delivering in line with guidance, with revenue growing by USD 1bn year-on-year in the second quarter. The profit was USD 490m higher than the same quarter last year, based on higher rates,”

Heathrow terminal 6

Heathrow terminal 6 in jeopardy

It has been decided that plans for a 6th terminal will be halted to keep costs down whilst the 3rd runway is being built.  

Heathrow published its half yearly report last month, which made no mention of the proposed plans.  Instead it stated that further investment in terminals 2 and 5 will go ahead instead, which allows the work to be done over a longer period of time to keep the costs under control. Whilst keeping costs under control, this also means that passengers will not face an increase in air fares despite the building of the 3rd runway.

When terminal 6 was submitted for public consultation it discussed the loss of up to 700 homes in the area, and was scheduled to be built by 2020.

According to the report, over 30% of the UK’s non-EU exports by value pass through Heathrow today. In the six months ended 30 June 2017, Heathrow’s cargo volumes increased 9.1% to 0.82 million tonnes, one of the strongest periods in the last 5 years in terms of year on year performance, with notable increases on North America and the Middle East.

John Holland-Kaye, Chief Executive Officer of Heathrow, said: “Heathrow’s strong start to 2017 is a boon for Britain…more British trade is flying high on new trading links and our expansion plans are on track. The Government set us the challenge to expand Britain’s hub while keeping airport charges close to current levels. Working with airlines, we are making good progress to meet this challenge whilst delivering all our local commitments and the global connections our country needs.”

Earlier this month it was announced that MPs will now not vote on Heathrow’s proposed expansion until 2018, with a final policy statement on airport capacity in the South East being delayed until next year.

container port Southampton

Southampton on the list of top container growth in 2016

During 2016 126 ports handled more than 1 million teu containers.

According to DynaLiners report entitled millionaires roundup, 82 ports had experienced growth in the year with 5 ports showing growth of 25% or more.

These ports were Chittagong, Bangladesh (26%), London (26%), Salalah, Oman (29%), Tangshan, China (27%) and Southampton (26%).

14 ports reached over 10m teu. These included Antwerp, Belgium; Busan, South Korea; Dubai, UAE; Hong Kong; Kaohsiung, Taiwan; Port Kelang, Malaysia; Rotterdam, Netherlands; Singapore and Tianjin, Shenzhen, Guangzhou, Ningbo, Qingdao and Shanghai, China.

New entrants to the table included Itajai with 1,104,100 teu and growth of 12%, Izmit with 1,143,000 teu and growth of 16%, Port Qasim with 1,124,000 teu and growth of 16% and Qinzhou with 1,138,000 teu and growth of 24%.

No ports dropped out of the table but 43 saw negative growth on 2015, of which Freeport (Bahamas) recorded the largest decline of -14%. Lagos and Port Said each had a 12% decline, Santos had a 10% decline, Tanjung Pelepas had a 9% decline, Hai Phong had an 8% decline, Lianyungang had a 7% decline, Long Beach had a 6% decline and Kingston had a 5% decline.

The total teu handled by the ports was 589,350,800, with other ports not on the list accounting for 117,649,200.

China topped the list of teu growth by country in 2016, maintaining its position from 2015.

The Far East, North Europe and North America retained position one, two and three respectively from 2015, with the Far East seeing a 2% YoY growth, 3% for North Europe and 1% for North America.

Of the terminal operators included in the data, PSA remained in first place with 56,300,000 teu, growing 6%, Hutchinson Ports also maintained second place but with a 3% dip in growth, followed by APM Terminals also staying at number three with a 3% growth. DP World was fourth, keeping its rank but with zero growth, Cosco Shipping Ports also stayed at number five with a 4% growth.

The report took into account full and empty, loaded and discharged, including transhipment containers. It noted that “Chinese port statistics often include (large) unknown quantities of containerised river cargo. Without these, some of them might even not qualify for millionaire status.”

• Source: Port Strategy

cosco oocl

Cosco’s acquisition of OOCL may face further hurdles

Although they resumed trading on the Shanghai Stock Exchange (SSE) this week, Cosco’s take over of OOCL could still hit a stumbling block.

Cosco’s shares were suspended two months ago and the SSE issued a letter of enquiry on July 18th seeking clarification on two points of the proposed deal. The first is whether it would clear anti trust and monopoly regulators around the world, and secondly, how Cosco intend to keep OOIL listed on the Hong Kong Stock Exchange as previously agreed.

Being allowed to resume trading must mean that the assurances given were satisfactory, however, the take over does still seem to be subject to regulatory review within other countries.

According to OOIL, the offer is ‘dependent upon the satisfaction of pre-conditions, which include the necessary regulatory approvals as well as approval from Cosco Shipping Holdings shareholders. The controlling shareholder, who currently holds 68.7% of OOIL, has irrevocably undertaken to accept the offer’.

Cosco have agreed to maintain OOIL’s listing on the stock exchange, and will make sure that the public shareholding ratio of OOIL meets the requirements of the Hong Kong Stock Exchange (HKSE).

Regulatory and shareholder approval are paramount to the deal going ahead, and it presumably isn’t going to be quick. In reality it may be more difficult to adhere to the terms agreed.

For more information on the take over, please take a look at this video