Dr. Erika Voss, Vice President and Chief Information Security Officer, DAT Freight & Analytics.
When you think about risk and safety in the trucking and logistics industry, your mind may jump to the immediate and tangible dangers: road accidents, vehicle breakdowns and compliance with transportation regulations. However, for modern enterprises, particularly shippers, the concept of safety extends far beyond these traditional concerns. Increasingly, companies are scrutinizing their supply chains through a cybersecurity lens, evaluating the risks that motor carriers pose to their data, business continuity, compliance and overall reputation.
In governance, risk and compliance (GRC), third-party risk is a critical focus. As a for-hire carrier, you represent a third-party risk to your clients, which is a variable they must manage diligently. This becomes particularly significant as organizations formalize and invest heavily in GRC frameworks. Your cybersecurity posture, therefore, can significantly influence your competitive positioning, especially during the RFP and onboarding processes.
Understanding Third-Party Risk Management (TPRM)
Third-party risk management (TPRM) is a systematic approach to monitoring and managing interactions with external entities. These entities range from contractual partners to informal noncontractual relationships. From a cybersecurity standpoint, TPRM encompasses all external parties you interact with and share data with, as well as the potential impact on your operations, financial health and reputation.
Assessing Your Cyber Risk Exposure
Start by mapping out every possible connection your operation has with customers, vendors, employees and regulators. Think about it: individual cell phones, computers, telematics devices, EDI connections and all applications or SaaS products used across departments. Each connection is a potential vulnerability that could be exploited in a cyberattack. Extend this mapping exercise to your vendors’ vendors to understand the full spectrum of your exposure.
Monitoring And Managing Third-Party Risk
Effective TPRM starts with understanding the level of data access each third party has and their cybersecurity health. Regular assessments and audits are crucial. These should evaluate how well your partners are protecting data, their incident response plans and their compliance with relevant regulations. For publicly traded companies, this includes adherence to new SEC guidance on data privacy and protection.
Achieving Executive Buy-In
Convincing leadership to invest in TPRM can be challenging, especially when the benefits aren’t immediately tangible and the initiative doesn’t directly generate revenue. But trust me—framing TPRM as a critical component of your overall GRC strategy can help. Highlight how robust TPRM not only mitigates risk but also strengthens your competitive position by aligning with customer demands for comprehensive risk management.
Operationalizing TPRM
To operationalize TPRM, integrate it into your broader GRC initiatives. This includes establishing clear policies for data sharing, implementing continuous monitoring tools and ensuring regular communication with third parties regarding their cybersecurity practices and any incidents that may affect your data.
Customizing TPRM For Your Business
The trucking and logistics industry is diverse, and so are the risks. A carrier hauling auto parts will have different third-party risk considerations than an asset-based broker or a one-truck owner-operator. Tailor your TPRM program to reflect the specific risks and requirements of your operation.
The Competitive Advantage
In today’s market, shippers are looking for partners who can support their risk management programs from the onset of the relationship through to off-boarding. Although price and service will always be pivotal, a well-executed TPRM program can be the differentiator that tips the balance in your favor. Demonstrating a strong cybersecurity posture reassures clients that their data and operations are secure, thereby enhancing trust and long-term partnership potential.
Conclusion
Third-party risk management is rapidly becoming a vital practice in the trucking and logistics industry. As the marketplace evolves, so must your approach to cybersecurity. By embracing TPRM, you not only help protect your operations but can also position your company as a leader in risk management. This proactive stance can transform risk management from a regulatory necessity into a strategic advantage, setting you apart in a competitive landscape.
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