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Ransomware is a computer virus that takes over the target device, restricts the owner’s access, and demands the victim to pay a ransom to get their device back. Modern ransomware can steal files, target locally-stored backups, spread through the network, and even bring large organizations to a standstill.

The device can get infected through a malicious email, a spoofed website, or in many other ways. Then, the attackers may scan the device for something valuable or, if pressed for time, start encrypting everything at once. After encrypting the data, the ransomware will display a ransomware note with detailed instructions on how to create a cryptocurrency wallet and send Bitcoin to the attackers’ address.

In Canada, two of the most recent high profile ransomware attacks have been to the Toronto Transit Commission (the largest public transportation network in Canada’s largest city) that knocked down some of its communications system and a provincewide disruption of health-care services in Newfoundland and Labrador that affected thousands of appointments and procedures, including those involving COVID-19 testing. The annual Canadian Internet Registration Authority (CIRA) Cybersecurity Survey says nearly 70 per cent of Canadian organizations facing a ransomware attack last year paid the demands to avoid downtime, reputational damage, and other costs.

In 2021, ransomware has increased to thousands of attacks per day and is predicted to cost businesses over $20 billion. Many successful attacks may be left undisclosed.

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I am a resident of Toronto, Ontario, Canada. I live in a city and province where Covid-19 is just about out of control. It did not have to be this way. The warning signs have been there for months. But the premier of this province just did not get it and still does not get it. The Covid-19 pandemic has exposed a core set of leadership skills that are determinants of how successful a politician is in managing this crisis. Premier Ford has not demonstrated that he has these key leadership attributes.

A Belief in Science

The science has helped us understand the key elements of this highly transmissible virus. The Ontario’s Covid-19 Scientific Table is composed of several very knowledgeable medical experts. They advised the politicians that the virus is spread between individuals who are in enclosed spaces and are close together. The scientists have told us for months that if we stay home, wear masks, and remain socially distant, we can greatly reduce the spread.

In Ontario, we are in the third wave of the virus. The number of new cases is rising on almost a daily basis. But Premier Ford has chosen to close parks, golf and tennis clubs but keep factories, warehouses, and places of worship open. Is there a need to manufacture ladies’ purses during a pandemic? Why place people in congregated indoor settings which increase the risk of catching the virus?

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Crafting a Pandemic Recovery Plan

Posted by on in Crisis Management

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There is considerable euphoria in the trucking industry these days. The July 2020 issue of Broughton Capital Truck Freight Barometers® is entitled “Fasten Your Seatbelts! The Economy & Truck Marketplace are Poised to Surprise to the Upside.” The issue contains the following thoughts.

“In all three modes, the Broughton Capital Truck Freight Barometers® are reflecting an environment in which demand exceeds capacity by a significant margin . . . the underlying fundamentals have never improved this dramatically in such a short period of time. The rapid, intense improvement runs counter to typical seasonality, making the gains even more impressive. Normally, July demand is softer than June . . . This year's Q3 trends, however, are shaping up to be exceptional in every way.” The report goes on to say the following.

“Consistent with our very bullish outlook for the U.S. domestic economy, the demand side of the equation is expanding robustly. Meanwhile, the capacity side of the equation has been constrained, which magnifies the imbalance and contributes to an extraordinary surge in spot rates. Today's spot rate levels are poised to exceed contract rates. As spot rates had fallen in April to record low levels, both nominally and in terms of the gap between spot and contract rates, the meteoric rise in spot rates over the last 13 weeks has been even more spectacular.”

Similarly, the Morgan Stanley Freight (MSFI) Index “has improved sequentially and outperformed seasonality for the 7th time in a row . . . On absolute terms, the index now sits at the highest level for mid-August in over a decade . . . Our straight-line forecast now projects 2020 ending the year nearly on par with 2017 levels, the highest YE level on record.” There is encouraging news on the Covid-19 front. This week reported new cases of the virus in the United States have dropped into the 30,000 to 40,000 range and reported deaths have dropped into the 400 to 500 range. Do these numbers signal a strong fall and winter season for the North American freight transportation industry? Here are a few thoughts to consider.

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In my previous blog (https://www.dantranscon.com/index.php/blog/entry/economic-recovery-and-the-future-of-the-freight-transportation-industry-part-1), I suggested that the economic recovery during the balance of this year will likely have a number of peaks and valleys that reflect the spread of Covid-19. In this blog I will explore some of Covid-19’s impacts on freight transportation.

The latest economic data “most closely resembles a horror movie with Q1 GDP posting the worst numbers since the global financial crisis, nearly a quarter of workers now unemployed, and durable goods showing the worst two-month streak since data collection began,” stated Brett F. Ewing, Chief Market Strategist, First Franklin Financial Services.  The job market halted its pandemic-induced collapse in May as employers brought back millions of workers and the unemployment rate unexpectedly declined. Tens of millions of American workers are still out of work, and the unemployment rate, which fell to 13.3 percent from 14.7 percent in April, remains worse than in any previous postwar recession. All the same, economists warn that it will take far longer for the economy to climb out of the hole than it did to fall into it.

The gains in May indicated that the Canada Revenue Agency, the U.S. Congress and the Federal Reserve had at least partly succeeded in limiting permanent economic damage by providing trillions of dollars in assistance to households and businesses. But that aid is now in jeopardy in the U.S., and economists warned that there was no guarantee the job market would continue to improve without it.

Even as the economy shows signs of revival, the United States is confirming more than 20,000 new coronavirus cases and 1000 deaths a day, with counts rising in at least 21 states. The protests over the past three weeks have brought thousands of people to the streets across North America, most close to one another. While many protestors are wearing masks, the lack of physical distancing will likely produce increased virus case counts in many locations.

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The recovery of the North American transportation industry is contingent upon the revival of the economies of the United States and Canada. The movement of auto parts, housing supplies, manufactured goods, food stuffs. and a host of other products drive the economy. If there are any impediments to the smooth operation of North American supply chains, this has a direct impact on the Transportation industry. This blog will focus on the forces shaping the revival of the two economies. Part 2 will focus on what the freight transportation industry will look like after the recovery.

Since the beginning of the Covid-19 crisis, Canada has lost about 3 million jobs while the U.S. has lost about 40 million jobs. Many of the unemployed have been forced to stay at home due to the contagious nature of the virus. For the past week, the United States has also been rocked by protests in over 75 major cities because of the killing in Minneapolis, Minnesota of an African American man, George Floyd, by a white police officer.

Most U.S. states and Canadian provinces are in “the restart” period. With no vaccine for probably nine months or more, companies need to generate revenue and profits during the “next normal” phase. Businesses and consumers are having to learn to adapt to the public health guidelines in each jurisdiction (i.e. social distancing, handwashing, mask wearing, drive to work rather than take public transportation etc.) and the new operating procedures (i.e. curbside pickup, controlled entry to stores and businesses, working from home etc.).

In the space of a few months, we have discovered that jobs that no one thought could be done remotely can be handled very effectively with a laptop computer and video conferencing. Cash-strapped businesses are learning that they can cut costs through the reduction or elimination of office space and its attendant costs. Teleconferencing reduces the need for business travel, another cost saver. Commuting costs can be cut – a walk to the home office beats hours in a car or on public transit. Of course, not everyone can work from home.

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As we watch the Covid-19 pandemic unfold, in real time, on our television and computer screens, we are observing major weaknesses in many of our essential institutions. Despite the warning from China at the beginning of this year, North Americans were unprepared for this pandemic. Before it even began, pandemic readiness work triggered by HIV and SARS epidemics had already been abandoned or scaled back for political rather than health concerns, leaving all of us vulnerable. Then there was a failure of the U.S. president to listen to the warning signals, to take responsibility for this crisis, to activate policies to produce protective equipment, to implement a national stay at home policy, and to ensure there were adequate tests to identify those who have Covid-19 and those who do not.

Our health care systems were overwhelmed by a lack of planning and resources. Our grocery and household goods supply chains were not ready for the huge upswing in online shopping and for the surge in demand for many items.

The result of these failures is that the United States is now the epicenter of the virus. Canada is also being hit hard. The pandemic is forcing millions of Canadians and Americans, other than those designated as providing essential services, to say at home to help reduce the spread of Covid-19. This necessary policy is causing the ongoing shutdown of many businesses and a loss of millions of jobs. As outlined in this article in Foreign Policy (https://foreignpolicy.com/2020/04/09/unemployment-coronavirus-pandemic-normal-economy-is-never-coming-back/), the “normal economy is never coming back.”

We are already seeing significant changes in our everyday lives. Many of us are becoming proficient at meeting with our family, friends and colleagues via a video conference. This trend will likely become more prevalent in our business lives after the crisis. Many people are becoming more skilled at purchasing groceries and supplies online and are taking the opportunity to upgrade their abilities in banking from home, home schooling, personal fitness, hair cutting and in a variety of other areas.

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These are amazing times, but this is not the first crisis that many of us have experienced. Having worked in the freight transportation industry for over 35 years, I have seen ice storms, snowstorms, SARS, mainframe crashes, tornados that have ripped the roof off buildings, the raiding of employees and customers and other challenging incidents. I have been the leader and observed other leaders guide their teams through these types of events. During this Coronavirus crisis, we have had the opportunity to observe the leaders of the U.S. government and medical emergency teams lead America through the epidemic. What are some lessons that we can all take from the events to date?

Lesson 1: Create and Maintain a Crisis Management Leader, Team and Plan

The White House had a pandemic team, but the leader left and was not replaced; the team was disbanded. These types of crises don’t happen every day; nevertheless, it is very helpful to have a leader, team and written plan for the major crises that can be anticipated. In certain parts of North America, one can anticipate a hurricane, tornado, ice storm or other type of natural or man-made disaster. The president reportedly ignored early warnings of the severity of the virus and grew angry at a CDC official who in February warned that an outbreak was inevitable.

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This has been a challenging month. Hurricane Harvey caused huge damage in southeast Texas and Hurricane Irma is expected to cause major damage to Florida and the east coast of the United States (as it did to several islands in the Caribbean). We should not forget the recent forest fires in British Columbia and California. Tornadoes, earthquakes, and ice storms seem to be occurring with much greater regularity and ferocity. These natural disasters have been very disruptive to the smooth flow of people, goods and services for many companies. They have also made life difficult for supply chain professionals.

Of course, disruptions to supply chains can come from factors other than weather or natural disasters. Quality control problems, piracy, export restrictions, and computer system hacking are just some of the factors that can come into play. To make matters worse, most of these disruptions are unpredictable in timing and scope. Each shipper has to make an assessment of the potential risks to their supply chains and make recovery plans.

According to Patthira Siriwan, senior project manager for supply chain development in North America for Damco, the combined logistics brand for A.P. Moller-Maersk, supply chain risks can be categorized into five groups: operational, social, natural, economy and political/legal. Damco defines supply chain risk management as “attempts to identify risks and quantify their commercial financial exposures as well as mitigate potential disruptions at each node and lane in the supply chain.” Supply chain risk models can vary from the rudimentary to the sophisticated. In the case of the latter, complex “what if” analyses can be performed. This allows the shipper and/or receiver to identify potential trouble spots and map out alternative supply chain strategies.

In an article in the Journal of Commerce, Siriwan indicated that shippers tend to focus on “factors with the biggest impact on their supply chain, such as on-time performance, supplier lead time variability and carriers by origin or trade lane.” Shippers need to perform some sort of probability analysis on the impacts of each potential disruption, with a particular focus on alternative vendors, carriers, origin points and ports and destination ports. Looking ahead to the balance of 2017, there are some major predictable (tropical storm Jose) and unpredictable risks that could drive up supply chain and transportation costs. The latter could include the impact on fuel costs as a result of unrest in Venezuela or war in the Middle East or war with North Korea.

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A Lesson from the Comey Firing

Posted by on in Crisis Management

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The firing of FBI director James Comey by president Trump is the biggest story of the week. Most of the focus has been on the constantly changing rationale for the termination. The television networks have been filling the airwaves with a variety of reasons for the firing. The various spokespeople including the president, VP, and assistant communications director have stumbled badly in telling a coherent, consistent and honest story.

Director Comey has been accused of being a “showboat” and “grandstander,” that “the FBI was in turmoil,” and that he was not doing a good job. Of course, one of the major issues behind this firing was clearly that Mr. Comey was leading the investigation into the possible collusion between the Trump campaign and Russia.

The director was in the third year of a ten-year term. According to the acting FBI director, in his testimony to Congress on Thursday, Mr. McCabe stated that director Comey had been highly respected throughout the agency.

There is no question that director Comey was a controversial figure. The Hillary Clinton e-mail server situation was a huge problem to the Democrats in 2016, possibly shifting the election at the last minute in favor of Mr. Trump. Then Comey mentioned in a public briefing to Congress earlier this year that he was investigating the links between the Trump team and Russia. In other words, he was investigating his new boss. This is not a winning strategy for job security unless the incoming administration has nothing to hide.

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These are tough times. In a recent issue (February 22, 2016) of the Journal of Commerce, the headline was “Is the US in a Freight Recession?” If a freight recession is defined as two or more consecutive quarters of year/year declines in freight volumes, parts of the US and Canadian transportation economy are certainly there. While we aren’t back into the Great Recession of 2007-2008, there has been a pronounced slowdown in business activity. Trucking industry executives confide that business volumes have tapered off.

This is when leaders are put to the test. Here are some thoughts on how to lead an organization through tough times.

1. Be Visible and Communicative

Don’t hide in your office all day in closed door meetings.  This is sure to unnerve your employees. Be visible and try to maintain a “business as usual” demeanor. Employees pick up on every change in behavior by its leadership team.

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