The Danish boss of DP World’s Oceania business, Nicolaj Noes – who has only been running the stevedore for three months after a long career with Danish shipping firm Maersk and its subsidiary Svitzer – told The Australian Financial Review it was difficult to put a financial value on the 30,000 containers.
“You can have a container of blood plasma that’s worth a million dollars, and then you’re going to have some used clothing for export worth $800,” Mr Noes said.
Containers were piling up at DP World’s terminal in Sydney’s Port Botany on Sunday because trucks could not get into the terminal to collect them. Oscar Colman
DP World was testing alternatives to its usual technical systems on Sunday afternoon but Mr Noes warned they would not operate at the same scale.
Containers that should have been delivered to customers on Friday may not be delivered until Monday or Tuesday, and only if DP World can restore its data systems.
“For some is not a big deal because it was some furniture that was supposed to go into stores anyway. But it could also have been a critical spare part that was missing to keep a factory running or for someone to start up their operation on a Monday,” Mr Nicolaj said.
He warned there could be a “snowball effect” from the delays in getting containers to customers, partially due to the difficulty of reassigning import and export slots when systems are restored.
DP World already has arrangements for some shipping lines to drop off containers at rival stevedores like Patrick, due to recent industrial action, and Patrick executives are understood to have contacted DP World to offer assistance.
But while DP World can direct ships to bypass its terminals, it can’t order ships to come and collect containers already sitting on its docks, partially due to customs regulations.
While DP World Australia’s parent company suffered a cyberattack about nine months ago, it is understood to have been less severe than the Australian attack.
No ransom demand yet
Mr Noes said DP World Australia had not received a ransom demand but confirmed it had cyber insurance. Insurance companies often decide whether or not to pay any ransom. The company did not foresee a scenario where it would need to pay a ransom, a DP World spokesman said.
Air Marshal Darren Goldie, the country’s cybersecurity coordinator, said the government’s opposition to paying ransoms applied in this case, despite the severity of the hack.
“We’ve explicitly given that advice to the company since this incident,” Mr Goldie said. He praised how DP World Australia was handling the hack, saying he had been speaking with the company every two hours since being informed of the breach on Friday evening.
DP World Australia is trying to be as transparent and communicative as possible to avoid being compared with Optus, which has been lashed for its poor handling of last year’s cyberattack and last week’s telecommunications outage.
Mr Goldie, Infrastructure Minister Catherine King and Home Affairs Minister Clare O’Neil, who described the cyberattack as “serious and ongoing” on Sunday afternoon, received a briefing from DP World on Sunday at midday.
Mr Noes said DP World did not know which organisation was behind the attack or where they were from.
“Frankly, we don’t know,” he said. He added the company had acted as if it was covered by the Security of Critical Infrastructure Act even though it was unsure whether it was required to comply, and contacted all relevant agencies around noon on Friday.
The Australian Federal Police and Australian Cybersecurity Centre are both investigating the hack.
The government has been told by DP World that it has “a limited ability” to get certain sensitive or time-critical cargo off ships and out of the port if necessary, Mr Goldie said. “At the moment, it’s a case of working out what their timelines are for them to restore their port operations to full capacity rather than starting to complicate matters by looking at individual consignments.”
Christmas stock unaffected
Paul Zahra, chief executive of the Australian Retailers Association, said the attack and ongoing industrial action at DP World underscored the sensitivities of supply chains and the need for urgent investment in supply chain resilience.
“We understand most retailers already have their Christmas stock holdings in country, but retail is a 52-week a year operation and so any significant disruption to port operations is potentially harmful,” Mr Zahra said.
Harvey Norman executive chairman Gerry Harvey said the disruption would hurt the company’s ability to import goods “across the board” but was unlikely to have a significant impact.
“If it lasts for a few days, it probably won’t have an impact at all,” he said. “Normally these things resolve themselves quite quickly.”
Department stores and supermarkets said they had already received most of their Christmas stock.
Woolworths’ shoppers, who encountered bare shelves during the COVID-19 pandemic, are not expected to see similar shortages because only a portion of the supermarket chain’s stock is handled by DP World and Christmas products have already arrived in Australia.
“We’re monitoring the situation, however we don’t anticipate any immediate impacts at this time,” a Woolworths spokeswoman said.
Senator James Paterson said that if the cyber incident was not resolved quickly, there could be serious consequences for the economy.
“Whoever is behind this attack, this is another test of the resilience of our critical infrastructure and whether we have sufficient redundancies in place,” he said.
Jim Wilson, policy advisor at Shipping Australia, which represents shipping liners, said some ships had been omitting port calls at DP World in recent months due to industrial action and that he expected other stevedores like Patrick to handle DP World’s containers temporarily.
“Typically, if one set of terminals is disrupted they subcontract to the other,” Mr Wilson said.
“The really big disruption tends to happen when the second set of the terminals runs out of capacity, that’s when you get massive land-side disruption.”
Shipping liners were flexible and could slow down or sail to alternative ports to avoid stopping at DP World’s terminals, but the incident showed the need for Australia to get on and build more container ports, he added.
Call to waive penalties
Neil Chambers, director of Container Transport Alliance Australia, said importers and exporters wanted to know if foreign container shipping lines would waive their penalty fees for the late return of empty import containers, or the detention fees that they can charge to exporters if containers are held for too long before being loaded onto vessels.
“There are import containers in DP World terminals that have been there over a week because of the difficulties in accessing them due to the protected industrial actions by the MUA,” Mr Chambers said.
“Now it will be further days – perhaps weeks – before those containers can be picked up.”
Few foreign shipping lines gave blanket exemptions from container detention fees during the COVID-19 pandemic, Mr Chambers said.
Transport operators had been told that Sunday’s slots had been cancelled, but were in limbo over whether trucking companies could collect and drop off containers on Monday or Tuesday.
They received messages from DP World Australia terminals on Sunday afternoon that the stevedore was hopeful of re-opening some terminals for container collection on Sunday evening but estimated times kept getting pushed back, Mr Chambers said.
Trucking companies expect DP World to concentrate on clearing imported containers before accepting more containers for export.
Freight and Trade Alliance director Paul Zalai said the cyber incident highlighted the need for more regulation.
“The Productivity Commission completed its review on Australia’s maritime logistics system in December 2022 and we are still awaiting a response,” Mr Zalai said.
“We can’t understand why the federal government is sitting back at a time when cascading costs are flowing down the supply chain fuelling inflationary pressures.”
Stevedores have been raising fees they charge trucking groups to bring containers in and out of ports, with DP World increasing fees on containers exported from Melbourne by 52 per cent to $175.70 per container from January.
NSW Ports, which operates Port Botany, Port Kembla and the Port of Melbourne, said they were trying to assist DP World Australia restore operations.
DP World handles some 2 million container lifts annually, a smidgen less than the 2.1 million handled by rival Patrick according to the competition watchdog’s most recent annual container ports monitoring report released in December 2022.
Other stevedores operating in Australia, including Victoria International Container Terminal and Hutchison Port Holdings, handle 500,000 container lifts or less annually.
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