Encryption at Rest and in Transit Policy: What E-Commerce Companies and 3PLs Must Get Right Together

Encryption failures are rarely caused by the absence of encryption. They occur because encryption exists in fragments, applied unevenly across systems, vendors, and data types, with no shared understanding of where protection begins and where responsibility ends.

An encryption at rest and in transit policy exists to remove that ambiguity. It defines how sensitive data is protected when it is stored, how it is protected when it moves, and who is accountable at each point in the data lifecycle.

For e-commerce companies working with 3PLs, this policy cannot live on one side of the relationship. Data crosses organizational boundaries constantly, and encryption that stops at the warehouse door does not hold up under real scrutiny.

What an Encryption at Rest and in Transit Policy Actually Covers

At its core, an encryption at rest and in transit policy outlines the rules and technical standards an organization uses to protect sensitive data in two states: stored and transmitted.

Encryption at rest applies to data stored in databases, file systems, backups, logs, and removable media. Encryption in transit applies to data moving between browsers and storefronts, platforms and 3PLs, internal services, and administrative interfaces.

A complete policy specifies which data must be encrypted, which encryption standards are acceptable, how cryptographic keys are managed, and how compliance is verified. Without those specifics, encryption becomes an assumption rather than a control.

Encryption at Rest: Protecting Stored Data From Exposure

Encryption at rest exists to limit damage when storage is accessed improperly, whether through system compromise, device loss, misconfiguration, or insider misuse.

For e-commerce companies, this typically includes customer records, order histories, credentials, operational logs, and backups. For 3PLs, it often includes shipping data, inventory records, customer identifiers, and integration artifacts that link back to the merchant.

A strong policy defines approved encryption algorithms, key lengths, and key handling practices, and it specifies where encryption must be applied rather than relying on broad claims that "data is encrypted." Databases, object storage, file systems, and backups should be addressed explicitly.

Encryption at rest is only as strong as its key management. Keys should be stored separately from encrypted data, access to them tightly controlled, usage logged, and rotation handled predictably rather than reactively.

Encryption in Transit: Protecting Data as It Moves

Encryption in transit protects data from interception, alteration, and replay while it moves across networks.

In e-commerce environments, this includes traffic between customers and storefronts, APIs connecting commerce platforms to 3PL systems, internal service-to-service communication, and administrative access to infrastructure.

A policy should mandate modern, secure protocols and explicitly prohibit weak or outdated ones. SSL and early versions of TLS fall into this category and should be disallowed outright. Encryption in transit should be the default, not an exception justified by performance concerns or legacy integrations.

For relationships with 3PLs, this means encrypted APIs, secure file transfers, authenticated connections, and periodic review to ensure protocols have not quietly aged into risk.

Encryption as a Shared Responsibility Between E-Commerce and 3PLs

Encryption responsibility does not stop at organizational boundaries.

E-commerce companies are responsible for how data is collected, stored, and transmitted to their 3PLs. 3PLs are responsible for how that data is stored, processed, and transmitted within their own environments and to any downstream partners.

An effective policy acknowledges this split and requires alignment. Encryption standards, protocol requirements, and key management expectations must be compatible across both organizations.

If an e-commerce company encrypts data in transit but a 3PL stores it unencrypted, the chain is broken. If a 3PL enforces strong encryption internally but receives data over weak protocols, the exposure still exists.

Data Classification Determines Encryption Strength

Not all data carries the same risk, and a policy should reflect that reality.

Data classification is the process of identifying and categorizing data based on sensitivity, regulatory requirements, and business impact. Customer PII, authentication credentials, and financial data typically demand the strongest protections.

Classification allows encryption to be applied deliberately rather than uniformly or arbitrarily. It clarifies where strict controls are mandatory and where lighter protections may be acceptable without creating unnecessary friction.

Without classification, encryption policies tend to either overreach and slow operations or underperform and leave gaps.

Automation Prevents Encryption From Degrading Over Time

Encryption controls are easy to weaken unintentionally.

Automated tools for key management, certificate rotation, and data discovery reduce reliance on manual processes that fail under pressure. Automation ensures encryption is applied consistently and that expired keys or certificates do not quietly erode protection.

For e-commerce companies and 3PLs operating at scale, automation is what turns encryption policy into durable practice.

Explicitly Banning Weak and Outdated Protocols

One of the most common policy failures is silence about what is not allowed.

A strong encryption policy explicitly prohibits weak or outdated encryption methods and protocols. SSL, early TLS versions, deprecated algorithms, and insufficient key lengths should be named and banned.

This matters most in long-lived integrations, where legacy decisions persist long after they are safe. Regular review of approved standards is as important as the initial selection.

Documentation Is Part of the Control

Encryption that cannot be explained does not inspire confidence.

A policy should require detailed documentation of encryption methods, key management practices, risk assessments, and audit trails. Documentation supports internal understanding, external audits, and incident response.

In shared environments, documentation is also how expectations are communicated between e-commerce companies and 3PLs. Ambiguity here leads to mismatched assumptions and avoidable exposure.

Continuous Monitoring Completes the Picture

Encryption is not a one-time configuration.

Continuous monitoring helps detect suspicious activity related to data access, key usage, certificate changes, and failed encryption events. Monitoring provides early warning when controls are bypassed, misconfigured, or under attack.

Without monitoring, encryption becomes static while threats evolve.

Best Practices for Implementing an Encryption Policy

Implementation works when it is systematic and shared.

- Classify data before applying controls
Identify and categorize data based on sensitivity and business impact so encryption requirements are intentional rather than generic.

- Automate key and certificate management
Use automated systems for key rotation, certificate renewal, and access control to reduce human error and configuration drift.

- Explicitly prohibit outdated protocols
Define which encryption methods and protocol versions are not allowed, and enforce these rules consistently across systems and vendors.

- Document encryption standards and decisions
Maintain clear records of encryption approaches, key handling, exceptions, and audit outcomes to support accountability.

- Monitor continuously for misuse or degradation
Track encryption-related events, access patterns, and anomalies to identify issues before they become incidents.

Why Encryption Policy Is an Executive Issue

Encryption at rest and in transit shapes risk exposure, regulatory posture, and trust across the supply chain.

For e-commerce leaders, the question is not whether encryption exists, but whether it holds when data moves across systems, vendors, and time. Policies that stop at internal boundaries fail under real operating conditions.

Handled well, encryption policy reduces friction by setting clear expectations. Handled poorly, it creates blind spots that only become visible after damage is done.

FAQ

Is encryption at rest always required?
For sensitive and regulated data, yes. Policies should specify where encryption is mandatory rather than relying on assumptions.

Is HTTPS enough for encryption in transit?
It is necessary but not sufficient. Protocol versions, certificate management, and internal traffic also matter.

Who owns encryption when working with a 3PL?
Both parties. Responsibility is shared, and gaps appear when either side assumes the other is covering it.

How often should encryption standards be reviewed?
Regularly, and always when systems, vendors, or threat conditions change.

Where do operational partners like G10 fit?
By enforcing disciplined data handling, aligning encryption practices across systems, and absorbing operational complexity so encryption standards hold under real fulfillment pressure.