Estimating Economic Losses from Cyber-Attacks on Shipping Ports: An Optimization-Based Approach

28 Pages Posted: 1 Apr 2021 Last revised: 9 Apr 2021

See all articles by Gabriel Weaver

Gabriel Weaver

University of Illinois at Urbana-Champaign - Information Trust Institute

Brett Feddersen

University of Illinois at Urbana-Champaign

Lavanya Marla

University of Illinois at Urbana-Champaign

Dan Wei

University of Southern California - Sol Price School of Public Policy

Adam Rose

University of Southern California - Sol Price School of Public Policy

Mark van Moer

affiliation not provided to SSRN

Date Written: March 31, 2021

Abstract

The Maritime Transportation System (MTS) accounts for more than 80% of global merchandise trade in volume and roughly a sixth of the Total Gross Output of the United States. Given that national and global economies depend upon efficient supply chains, port stakeholders must develop security plans to respond to all hazards, natural and manmade. Given recent cyber attacks affecting shipping ports, along with the multi-billion dollar cyber insurance gap, ports need to understand the tradeoffs between increased competitiveness and increased risk through investment in automation and advanced logistics technologies. This article addresses the need to understand the economic impact of cyber attacks that affect shipping port operations and thereby enable risk assessments that holistically evaluate interactions among port Information Technology (IT) and Operational Technology (OT) systems. We extend Boland et al's Dynamic Discretization Discovery (DDD) algorithm to include capacity constraints and delay arcs to accommodate commodities arriving late due to disruption. Using a Nearly-Orthogonal Latin Hypercube (NOLH) experimental design, we construct disruption profiles based on actual cyber attacks that specify the range of operational effects of IT/OT dependencies on stakeholder transportation assets. Economic loss functions for seven commodity categories based on the willingness to pay literature are used to compute delay costs so that stakeholders can estimate the range of economic and operational impacts within a disruption profile. Results based on data provided by Port Everglades, FL, illustrate impacts at $80,000 and $1.2M on average for cyberattacks on landlord port and terminal operator assets during the first week in October, 2017. The runtime performance of our DDD algorithm improves on the state of the art by an order of magnitude and on larger problem sizes based on real-world port networks.

Suggested Citation

Weaver, Gabriel and Feddersen, Brett and Marla, Lavanya and Wei, Dan and Rose, Adam and van Moer, Mark, Estimating Economic Losses from Cyber-Attacks on Shipping Ports: An Optimization-Based Approach (March 31, 2021). Available at SSRN: https://ssrn.com/abstract=3816659 or http://dx.doi.org/10.2139/ssrn.3816659

Gabriel Weaver

University of Illinois at Urbana-Champaign - Information Trust Institute ( email )

United States

Brett Feddersen

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

Lavanya Marla (Contact Author)

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

Dan Wei

University of Southern California - Sol Price School of Public Policy ( email )

Los Angeles, CA 90089
United States

Adam Rose

University of Southern California - Sol Price School of Public Policy ( email )

Los Angeles, CA 90089-0626
United States

Mark Van Moer

affiliation not provided to SSRN

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