As part of this network, Gallagher is in the fortunate position to deliver knowledge about the numerous technological innovations in the cold storage industry and spread awareness on how businesses can better protect themselves against risks.
The cold chain is essential to the functioning of many industries within the supply chain. Whether it is agricultural produce or pharmaceuticals — frozen or ambient — the cold chain ensures the rapid transportation and secure storage of products, preserving their shelf life and quality. Over the last few years, technological developments in the cold chain industry have enabled more efficient product storage while reducing operational costs.
Automation in cold storage facilities has improved workflow, minimised downtime, improved safety and allowed for better inventory management. Innovations such as RAFT AS/RS (Right Angle Fast Transfer Automated Storage and Retrieval Systems) and ERP (Enterprise Resource Planning) systems have boosted productivity, facilitating better decision-making processes.
Advancements in refrigeration technology, including remote and efficiency monitoring, have significantly enhanced operational capabilities. AI and machine learning have also enabled improvements in demand forecasting and predictive maintenance of equipment while optimising storage layouts and ensuring peak efficiency.
While these transformative changes have significantly enhanced the quality of operations within the cold chain, they may also expose cold storage facilities to an increased risk of cyber-attacks.
Technology and cyber risks in cold chain logistics
In the cold chain, goods move across multiple checkpoints before reaching the consumer. Technological advancements have ensured that businesses remain connected at all stages with the help of the right software. However, this interconnectedness also increases cyber vulnerability. In 2024, reports suggested that 50% of all UK businesses had experienced a cyber-attack or security breach in the previous 12 months alone.1 There are several ways this can occur:
- Data Breaches: Warehouses and storage facilities often store sensitive data,including supplier information, customer data and inventory details. In the event of a cybersecurity breach, this data can be used by hackers to carry out identity theft or fraud, leading to substantial financial damage while also affecting business reputation.
- Ransomware attacks: Hackers may aim to deploy ransomware at facilities dependent on digital systems for day-to-day operations, encrypting the facility's data and demanding a ransom for its release.
- Industrial espionage: Malicious actors may hack into the facility's digital system to access sensitive information such as pricing strategies, storage techniques and client details. Cold storage facilities can also be targeted to gain access to other connected systems or organisations in the larger supply chain.
- Phishing and social engineering: Employees working at cold storage facilities can unknowingly become targets of cyber-attacks via phishing emails or social engineering tactics used to extract sensitive information.
- Operational disruptions: Hackers may also aim to cause financial damage by disrupting the operations in a cold storage facility. They may do so by compromising control panels that regulate temperature, leading to product spoilage and, ultimately, significant financial losses.
How cold storage operators can minimise risks
Disruptions due to cyber-attacks can lead to considerable loss of time and money for chain industry operators, so prioritising measures to minimise cyber threats and enhance security is key.
Strong network security measures like intrusion detection systems and firewalls that monitor and prevent unauthorised access, are vital starting points. Advanced data encryption technologies ensure that sensitive data remains secure and cannot be tampered with even when intercepted.
Operators may also want to invest in employee training and awareness. Security training programmes and incident response protocols are crucial for preventing accidental data breaches while also ensuring speedy action in the event of an attack. Developing and frequently refining a strong business continuity plan can also help operators recover quickly from a cyber incident.
As hackers become more advanced in carrying out cyber-attacks, staying updated on the latest technological advancements in cybersecurity measures ensures operators can incorporate these swiftly to mitigate breaches.
Case Study: Ransomware attack at SaaS provider affects UK supermarkets
In November 2024, a prominent US-based supply chain management software provider fell victim to a ransomware attack. This cyber-attack significantly impacted two UK-based supermarket supply chains that relied on the provider's services.
The ransomware attack resulted in the locking of the company's files, systems, and networks. Investigations revealed that employee details and customer credentials were leaked on the dark web.
The attack specifically affected the supermarkets' warehouse management systems for fresh foods and produce. As a result, shoppers were surprised to find empty shelves at the affected supermarkets for several days following the cyber-attack.
By January 2025, the company disclosed that the incident had negatively impacted sales during the Christmas quarter.2 They also reported that product availability had improved since the attack, although it had not yet returned to pre-incident levels.
Risk and insurance considerations for cold chain operators
Regular security audits and insurance protection are vital tools in helping operators stay ahead of emerging threats. Vulnerability assessments help identify physical, operational and cyber weaknesses in security systems, enabling operators to take proactive measures to address them.
Policies must also be reviewed often to ensure that they align with evolving business needs. Operators also need to pay special attention to legal and regulatory compliance, such as GDPR (General Data Protection Regulation), not only to avoid legal penalties, but also to strengthen their cybersecurity measures.
Very importantly, operators must choose the right cyber insurance policy in accordance with their business needs and risks. Tailored insurance coverage will address specific risks related to warehousing operations in the cold chain and protect businesses from heavy losses.
Gallagher's specialist team of insurance providers and consultants understand the evolving needs of the cyber insurance space. Our trusted advisors can focus on designing a cyber-protection programme tailored to your unique business requirements and industry. Speak to our cyber-protection experts to find the right coverage for you.
