Mainfreight boosts cyber defences in $68M spend

Mainfreight boosts cyber defences in $68M spend

'Proprietary' is not a dirty word at Mainfreight, but a competitive advantage.

Credit: Supplied

NZX-listed logistics and transport company Mainfreight boosted its cyber defences in the year to 31 March as part of a close to $68 million investment in technology.

"The ever-present risk to system resilience and business continuance posed by cyber threat, has seen us invest heavily in strengthening our protocols, monitoring and training," the company said in its annual report, released today.

"Cyber security training internally, and the implementation of significant firewall security systems have been features of this investment."

Along with cyber security, Mainfreight also ensured updated disaster recovery sites were in place in New Zealand and the USA. 

Of the  $67.5 million invested on the company's global technology platforms in 2021, 26.7 per cent ($18 million) was capitalised for the development of new or enhanced systems.

Mainfreight spent $60.4 million on technology in 2020 and $57 million in 2019.

The company, which has a market capitalisation of $7.6 billion, has been on a multi-year journey to replace, update and standardise its technology globally and that continued in 2021.

"We continue to invest strongly in our own proprietary technology to complement our business operations," the report said.

"This has served our customers and ourselves well over time. In particular, we have always wanted our customers to see what we could see; a 'warts and all' approach."

With time and investment, the company's technology had become increasingly sophisticated. 

"Our platforms around the world are mostly common in origin, and integrated to provide global visibility to ourselves and our customers for their complete supply chain requirements," Mainfreight reported.

"These platforms not only provide simple track-and-trace, but are also able to manage stock flows and optimisation of trade to ensure efficiency and accuracy at all times; a significant strategic value which is one of our selling propositions to new customers."

This included bringing more real-time efficiency to transport cross-docks with electronic wands used to scan delivery labels at the time of loading. 

The introduction of automation to warehouse operations would require further software development to create data efficiency alongside the physical efficiencies that will deliver.

"It is our expectation that with changing supply chain requirements emerging post-pandemic, the usefulness of our technology to deliver efficiencies, will be valued by existing and new customers alike, when searching for trading advantages," Mainfreight said.

Technology in Europe was "being brought up to Mainfreight standards" to achieve a consistent global platform for stability, security and flexibility. 

Decentralising core applications to regional data centres put them close to the end user, to provide local resiliency for the company's team and customers.

"This also provides an environment where we are able to respond to cyber threats faster and with more certainty," the report said.

The increased spend is surprising, given last year the company said it would spend less on technology.

Mainfreight told investors then that it was scaling back capital investment in ICT for the foreseeable future to reflect the economic environment and the needs of the business.

"This is not a time for 'nice to have' projects," the NZX-listed company said in its 2020 annual report.

However, Mainfreight's major competitor in both Australia and New Zealand, Toll Group, was hit by a debilitating ransomware attack last May.

The 2021 financial year saw the departure of 35-year company veteran and long serving IT leader Kevin Drinkwater. 

John Eshuis, who had been with Mainfreight for 18 years, replaced him at the start of 2021. 

"This is another example of our philosophy of promoting from within, and provides continuity for our technology strategies," Mainfreight said.

"We remain confident that our proprietary systems will continue to provide competitive advantage for ourselves and our customers alike.

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