In today’s logistics landscape, smart warehouses are reshaping how goods are stored, picked, and shipped. Advanced automation, IoT-enabled devices, and AI-driven analytics now power these facilities, helping businesses increase speed, efficiency, and accuracy.
According to Deloitte, nearly 79% of leading supply chain companies have invested in smart warehouse technologies in the last three years.
Yet as warehouses become more connected, they also become more exposed. The growing digital footprint expands the attack surface for cybercriminals and makes the task of safeguarding data and operations far more complex.
Proxy Providers: Emerging Gateway Risks in Smart Warehouses
Proxy providers are services that route internet traffic through intermediary servers, offering benefits like enhanced privacy, location masking, and traffic management.
In legitimate contexts, businesses use proxy providers to manage corporate browsing, conduct market intelligence, or avoid regional content restrictions. However, in smart warehouse environments, the role of proxy providers is becoming a double-edged sword. 
Here’s the evolving risk: attackers are increasingly exploiting proxy providers to mask malicious traffic targeting warehouse networks.
Cybercriminals can purchase access to large proxy pools, making it extremely difficult to distinguish genuine partner communications from threat actors attempting to breach connected devices such as inventory robots, RFID readers, and automated conveyors.
Recent reports indicate that warehouse management system (WMS) platforms with API endpoints exposed to the internet are a frequent target. Threat actors use proxy-based traffic to conduct credential stuffing attacks or API abuse undetected by standard IP filtering.
Furthermore, malware campaigns are now embedding proxy services to disguise command-and-control traffic emanating from compromised IoT sensors inside warehouses.
Warehouse operators must therefore update network security policies to account for the increasing volume of traffic relayed through proxy providers. Recommended actions include:
- Implementing stricter application-layer inspection to validate traffic intent
- Applying geo-fencing and anomaly-based detection on inbound and outbound traffic
- Maintaining threat intelligence on known malicious proxy IP ranges and updating blocklists regularly
As warehouse connectivity grows, proxy-based risks will likely escalate further unless organizations take proactive measures to fortify their defenses.
Expanding Iot Ecosystems: The Connectivity Challenge
The adoption of IoT in smart warehouses is accelerating. Gartner predicts that by 2026, the typical warehouse will feature over 10,000 connected devices – ranging from smart shelves and forklifts to temperature sensors and smart lighting systems.
While these devices enable precise tracking and adaptive control, they also introduce substantial security complexity.
Each connected device represents a potential point of entry for attackers. Many IoT components rely on lightweight operating systems with minimal security hardening. Vendors often neglect timely patching or fail to provide long-term support.
As a result, warehouse networks may contain thousands of vulnerable endpoints susceptible to exploitation.
Moreover, IoT traffic often bypasses traditional perimeter defenses by communicating peer-to-peer within segmented warehouse zones. Compromised devices can quietly exfiltrate data or act as staging points for lateral movement inside the corporate network.
To address this growing risk, warehouse IT teams must implement a robust IoT security framework, including:
- Comprehensive device inventory and continuous vulnerability scanning
- Strong device authentication and encrypted communications
- Network micro-segmentation to contain IoT zones and isolate critical systems
- Automated patch management and firmware updates across all connected devices
By taking these steps, operators can harness the benefits of IoT while minimizing its exposure to evolving connectivity threats.
The Cloud Dependency Dilemma
Cloud-based WMS and warehouse control systems (WCS) are now the norm in modern facilities. These platforms offer unmatched scalability, real-time analytics, and seamless integration with supply chain partners. Yet heavy cloud dependency introduces a new layer of connectivity risk.
First, any disruption in cloud connectivity – whether due to internet outages, misconfigured network policies, or upstream provider incidents – can paralyze warehouse operations. Automated picking robots may halt mid-task, inventory updates can stall, and shipping labels may not print.
Second, cloud services themselves are attractive targets for attackers. A compromised WMS provider could serve as a backdoor into hundreds of customer warehouses. In 2024, a ransomware attack on a European cloud WCS vendor disrupted over 200 distribution centers across 14 countries.
Third, shared API integrations between cloud platforms and external logistics partners can propagate security weaknesses across an entire supply chain. Attackers may abuse insufficiently secured APIs to extract sensitive warehouse data or inject malicious commands.
To mitigate cloud dependency risks, warehouse operators should adopt best practices such as:
- Designing hybrid architectures with on-premises fallback capabilities
- Establishing multi-cloud or backup WMS/WCS providers where feasible
- Conducting regular third-party security assessments of all integrated cloud services
- Implementing API gateways with strict authentication and rate limiting
These strategies help balance cloud-driven efficiency with the need for resilient and secure warehouse connectivity.
Rethinking Network Segmentation And Access Control
Many smart warehouses were originally built with flat network architectures designed for legacy systems. As connectivity demands surged, additional devices and systems were layered on without fully revisiting network design.
The result is often a tangled environment with weak segmentation – ideal conditions for attackers to exploit.
Modern network segmentation must evolve to meet the needs of hyper-connected warehouses. This means moving beyond simple VLANs to implement true micro-segmentation, where granular policies govern traffic between individual devices and applications.
Effective segmentation makes it much harder for attackers to pivot laterally if an initial breach occurs. For instance, a compromised IoT sensor should never be able to initiate connections to the WMS database or the enterprise email server.
In parallel, access control policies must be modernized. Warehouse networks often still rely on shared credentials, poorly managed service accounts, and overly permissive access privileges.
Zero trust principles – where every user, device, and application must continuously prove its identity and authorization – should be the new baseline.
Key tactics include:
- Adopting identity-based access controls with strong multifactor authentication
- Implementing just-in-time access and privilege elevation for sensitive systems
- Continuously monitoring access patterns and revoking unused or abnormal permissions
Through rigorous segmentation and access control, warehouse operators can dramatically reduce the blast radius of potential cyberattacks.
Wrapping Up
As global supply chains grow more interconnected, third-party risk management will become an even more critical focus for smart warehouse operators.
Vetting the cybersecurity posture of logistics partners, technology vendors, and even contractors will help prevent weak links in an otherwise secure system.
Investing in collaborative threat intelligence sharing across the industry can further strengthen collective resilience against the next generation of connectivity threats.
Main image by Adrian Sulyok on Unsplash
