Cooperation as a crisis strategy?

Almost a year ago, LOGISTICS PILOT spoke with Professor Julian Hinz, lecturer at Bielefeld University and Head of the Research Center Trade Policy at the Kiel Institute for the World Economy (IfW Kiel), for the first time about how geopolitical tensions are affecting global trade and the maritime economy. With developments in the Red Sea and the sanctions against Russia and Iran in mind, he emphasised that the geopolitical climate at the time had made “de-risking” the order of the day. All this spoke in favour of diversifying both supply chains and trading partners, in order to reduce dependencies on individual suppliers, countries and trade routes. “Nothing’s fundamentally changed,” he says today. “There are still 70 per cent fewer ships sailing through the Red Sea than before the first attacks by Houthi rebels in November 2023. However, the global trade climate has also become significantly more challenging.”

He identifies, among other things, the latest developments in the USA, particularly the Trump administration’s tariff policy, and the Middle East conflict as key factors in this. “With its current policy, the USA is a hotbed of uncertainty,” he states. He believes that, in such situations, global trade usually reacts cautiously and postpones planned innovations and investments. For the shipping industry, this usually means less business, less cargo on board the ships and, in turn, a fall in demand and less income. “It’s up to Europe to chart the right course here,” Hinz advises, implying we should make a virtue out of necessity. “It’s true that Europe does ten per cent of its trade with the USA, which certainly isn’t a small amount. At the same time, though, a market share of 90 per cent and many partners around the globe who pursue similar economic interests to those of Germany and Europe as export nations are out there.” The task now is to conclude, finalise or modernise further trade agreements with these nations. Indeed, Hinz is shifting his focus partly to the OECD countries, particularly Canada and Australia. Likewise, the agreement between the EU and the Mercosur countries, signed in December 2024 after almost 25 years of negotiations, must be ratified quickly by all member states.

Uncertainty is not helpful

Daniel Hosseus, Managing Director of the Association of German Seaport Operators (ZDS), also assumes that current US policy could have an adverse impact on the economy and international trade policy. “The uncertainty sown by the American government – whether in Greenland, Panama, the Suez Canal or elsewhere – isn’t helpful,” he says, “nor are the announcements of new tariffs. They’re shooting themselves in the foot, as they now also risk being hit by tariffs. After all, they want to sell their products and services on the European market, too.” This is why he hopes that the EU will present a strong, united front in the trade dispute and implies possible trade substitution effects. “It remains to be seen whether Trump’s actions will actually lead to less freight traffic or whether goods will just find other routes. This doesn’t necessarily have to be a bad thing for the European and German economy,” Hosseus predicts.

“The cooperation between the German ports works very well,” Hosseus concludes with regard to Germany as a business location. The ZDS embodies the daily cooperation of 20 seaports and around 140 companies involved in seaborne cargo handling on the Baltic and North Seas. “When talking about cooperation between ports,” he continues, “we must always clarify who should work with whom and on what. I think that things are working really well at federal state level and in the context of cross-border marketing cooperation. And the companies also work well together where it’s sensible for them to do so. Nevertheless, we must be clear. These are market-based decisions that each company makes for itself and which are subject to legal conditions, antitrust law for instance. Politics should stay out of it.”

However, Hosseus does see a need for politics to get involved when it comes to improving infrastructure and suprastructure in the ports. “The energy transition and these changing times demand huge investments quickly, which the federal states and industry can’t provide.” Billions in investments are needed every year, also due to the new requirements placed on the ports by the government. Consequently, significantly more money must flow into the system. “Germany is the third-largest economy in the world,” he adds, emphasising what he considers to be the prominent role of the country’s ports. “The majority of our foreign trade is transported by sea. Moreover, the ports are not only an important basis for prosperity and security in Germany, they also support change throughout our country. The government must be involved in this.”

“Even the bad guys are getting better and better”

Professor Carlos Jahn, Head of the Fraunhofer Centre for Maritime Logistics and Services (CML) in Hamburg, has a plausible explanation for why maritime structures and ports are particularly vulnerable to cyberattacks in these difficult times. “They’re complex systems in which a large number of different parties are interconnected to a very high degree,” he explains. Plus, many different modern and older systems interact within these structures, which create gateways for such attacks, especially at the interfaces. “The main risks are in accessing routing systems, inventory and customer records, but also in the loss or blocking of sensitive company data,” he continues, outlining the breadth of the risk spectrum.

In this context, Jahn has identified that there is not only a growing number of cyberattacks on ports, maritime facilities and ships, but these criminal acts are also increasing in quality. “Even the bad guys are getting better and better,” he concedes, without wishing to downplay the seriousness of the situation. He makes this point to emphasise that both sides are in constant competition – the “good guys” are working to make systems more secure, while the “bad guys” are trying to identify and exploit their weak spots.

In their Ship Cybersecurity Lab in Hamburg, experts at the CML are looking for answers to urgent questions on cybersecurity and more.

Based on a multitude of different studies, Jahn groups cyberattacks into four categories. “Around 50 per cent of attacks involve ransomware and malware attacks,” he says. In these cases, the data on an IT system is encrypted and only decrypted again once a ransom has been paid. Alternatively, malicious software is introduced into the system in order to destabilise it. “DDoS attacks and insider threats, human error, phishing emails and data manipulation each account for a quarter of the cases,” the expert adds. Distributed denial-of-service (DDoS) attacks are activities that contribute to, for example, taking down websites or disrupting the availability of network resources. In this respect, Jahn refers to the insights he has recently gained in collaboration with external IT specialists at the in-house ship cybersecurity lab in Hamburg. “I’ve known for a while that AIS (Automatic Identification System) data can be falsified, but that radar can also be manipulated was news to me.”

He considers regular testing and updates, raising employee awareness, ongoing training and dialogue between all parties involved in ports and logistics to be important IT security safeguards. “Nothing’s perfect, there’s always room for improvement. It can’t hurt if those affected share what they know and talk openly about cyber issues,” states Jahn. In light of this, he acknowledges that companies within the industry have taken a significant step towards greater transparency in recent years and that incidents of this kind are rarely swept under the carpet any more. Furthermore, the ports are really well prepared. This is proven, for example, by the fact that ports such as Hamburg, Bremerhaven and Cuxhaven are hit by cyberattacks multiple times every week, but only a fraction of them are successful. “This is good, but every successful attack is one too many,” he concludes.

Soldiers sending messages with a semaphore lamp. Despite the latest technologies, optical signalling is still valued as a secure, analogue means of communication.