February 20, 2025
January 2025
Editorial
January - the global supply chain landscape is entering 2025 with a mix of technological innovation, operational shifts, and geopolitical uncertainties. From AI-driven advancements to shifts in global freight and evolving retail trends, businesses are being forced to adapt rapidly to maintain efficiency and profitability.
AI and Automation: A Game-Changer with Growing Concerns Artificial intelligence continues to disrupt industries, with DeepSeek’s rise challenging U.S. AI dominance, Walmart slashing delivery costs through automation, and warehouse robotics adoption rebounding in 2025. However, labor concerns persist, as seen in UK fears over AI’s impact on inequality and the longshoremen’s opposition to automation at U.S. ports. AI remains a double-edged sword—enhancing efficiency while raising critical workforce challenges.
Global Freight Faces Disruptions and Green Innovation Freight and logistics remain volatile amid Middle East tensions disrupting Suez Canal traffic and potential U.S. tariff shifts under Trump’s presidency. Meanwhile, the maritime industry is under pressure to transition to scalable green fuels like green methanol and ammonia to meet climate goals. Major logistics players, such as Rock-it Cargo partnering with FIFA and Schenker AG securing Olympic contracts, highlight the growing demand for specialized freight services in large-scale global events.
Retail and Sales: A Tough Climate for Businesses Despite a December sales boost from Black Friday and Christmas shopping, overall 2024 was weak for UK retailers, with footfall declining for a second year. Primark’s rare sales drop and Apple’s iPhone slump signal shifting consumer behavior. The retail sector faces further pressures in 2025 due to rising taxes, wage hikes, and inflation-driven price increases, while brands like Jaguar Land Rover pivot to electric vehicles to stay competitive.
As businesses navigate these evolving challenges, adaptability, innovation, and strategic investments will be key to staying ahead in an increasingly complex supply chain environment.
Global Freight
IOC signs long-term partnership with global freight forwarder Schenker
- The International Olympic Committee (IOC) has signed a long-term partnership with Schenker AG, making it the Official Supplier for freight forwarding and customs clearance services for multiple Olympic Games, including Athens 2004, Turin 2006, and Beijing 2008.
- Schenker AG, a global logistics provider, will dedicate a specialized team to Olympic-related activities, ensuring continuity and expertise in logistics for the Games and major IOC events.
- The shipping industry must transition to scalable green fuels, such as green methanol and blue/green ammonia, to meet the International Maritime Organization’s (IMO) targets of reducing carbon intensity by 40% by 2030 and achieving net-zero emissions by 2050.
- Successfully scaling these fuels requires optimizing production processes, investing in infrastructure, developing clear regulatory frameworks, and fostering collaboration across industries to drive innovation and adoption in the maritime sector.
- Despite a ceasefire between Israel and Hamas, uncertainty remains in the Middle East, with shipping through the Suez Canal still disrupted due to doubts over Houthi commitments and ongoing geopolitical risks, leading carriers to continue rerouting via the Cape of Good Hope.
- The global shipping industry faces further volatility with Trump's return to office, as potential tariff changes and geopolitical shifts could impact trade flows, while carriers adapt to fluctuating demand and capacity management strategies to maintain profitability.
- FIFA has appointed Rock-it Cargo as the Official Logistics Provider for the FIFA World Cup 2026™, responsible for managing customs, international freight forwarding, warehouse operations, and team equipment logistics across 16 host cities in Canada, Mexico, and the USA.
- The multi-year partnership begins in 2025, with Rock-it Cargo also providing logistics support for the FIFA Club World Cup™, leveraging its extensive experience in event logistics, contingency planning, and large-scale coordination to ensure smooth tournament operations.
- In 2023, EU sea ports handled 3.4 billion tonnes of freight, a 3.9% decline from 2022 but a 5.0% increase from 2013, with the largest share consisting of coal, crude petroleum, and natural gas (21.0%), followed by petroleum products (16.1%) and metal ores (7.2%).
- The Netherlands remained the top maritime freight transport country with 545 million tonnes, followed by Italy (501 million tonnes) and Spain (472 million tonnes), though all three saw volume declines, with Estonia (-31.0%), Latvia (-21.5%), and Finland (-9.0%) experiencing the largest relative drops.
Technology, Automation & AI
DeepSeek: The Chinese AI app that has the world talking
- Chinese AI startup DeepSeek has rapidly gained global attention, rivaling OpenAI's technology at a fraction of the cost, causing a sharp decline in US tech stocks, including Nvidia, and raising concerns over China's growing AI capabilities and independence from Western technology.
- While DeepSeek's rise is celebrated in China as a sign of its technological leadership, it has faced scrutiny worldwide, with Australia and Italy banning its use on security and data protection grounds, highlighting global concerns over Chinese AI development and data privacy practices.
- Labor negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have stalled over automation concerns, with the ILA firmly opposing any new automation at East and Gulf Coast ports, arguing it threatens jobs and traditional work functions.
- While USMX insists that automation is necessary for modernization and supply chain efficiency, the ILA remains open to technology improvements only if human workers remain in control, leading to a deadlock in discussions ahead of the January 15, 2025, contract deadline.
- Walmart reduced U.S. delivery costs per order by 40% in Q3 for the third consecutive quarter through increased automation, more efficient driver routes, and higher penetration of paid expedited deliveries, with over 50% of fulfillment center volume now automated.
- Store-fulfilled delivery sales surged nearly 50% year over year, with over 30% of customers opting for ultra-fast delivery (within three hours), as Walmart prioritizes both speed and efficiency to compete with Amazon while maintaining confidence in e-commerce profitability.
- Warehouse automation is set to rebound in 2025, with industries like consumer product goods (CPG), industrial, and automotive increasingly adopting robotics and automated storage/retrieval systems (AS/RS) to boost efficiency, flexibility, and throughput without expanding facilities.
- As competition intensifies, companies must carefully assess automation solutions, focusing on proven technologies, reliable partners, and data-backed results, while considering full supply chain transformations for maximum impact rather than just adding automation for its own sake.
- The automation of millions of jobs in the UK could widen inequality unless the government steps in to support small businesses and workers, as a report by the Institute for the Future of Work (IFOW) highlights widespread anxiety over AI's impact on employment and job satisfaction.
- The report recommends regional science centres, devolved decision-making, and stronger union rights to ensure AI fosters productivity and prosperity without increasing stress, while emphasizing that the impact on jobs depends on how firms implement AI, rather than the technology itself.
Sales & Operations
December sales provide little cheer for retailers
- December retail sales grew by 3.2%, driven by Black Friday and Christmas shopping for beauty products, jewellery, and AI-enabled tech, but overall 2024 was a weak year for retailers, with annual sales rising only 0.7% and non-food sales falling 1.5%.
- Footfall in physical stores declined for the second year in a row, with high streets and shopping centres seeing fewer visitors, while rising costs from taxes, wages, and packaging levies are expected to make 2025 even more challenging for retailers
- Primark reported a rare 6% decline in like-for-like sales in the UK and Ireland during the crucial Christmas quarter, citing weak consumer demand and warm weather, leading to lowered sales growth expectations for 2025 despite strong performance in emerging markets like the US, France, and Spain.
- The wider UK retail sector faces declining consumer confidence, with businesses warning that rising taxes, employer costs, and new levies could result in higher prices, job cuts, and reduced investment, as economic stagnation and cost-of-living pressures weigh on shoppers' spending habits.
- Apple's iPhone sales fell 1% to $69.1bn, partly due to a lukewarm response to its AI features, while overall revenue grew 4% to $124.3bn, driven by strong computer and services sales, despite challenges like a China sales decline and potential US tariffs on Chinese-made products.
- CEO Tim Cook confirmed AI features would expand to more languages in April, but early issues with AI-generated news summaries raised concerns, and analysts suggest Apple must accelerate AI rollouts and explore new product innovations to maintain its competitive edge
- Jaguar Land Rover (JLR) has halted new Jaguar car sales in the UK ahead of its 2026 relaunch as an all-electric luxury brand, with the first new model—a four-door GT—set to be built in Solihull, while remaining dealership stock will now be sold as second-hand vehicles.
- JLR has invested over £750 million in UK electric vehicle production, including a £500 million upgrade at Halewood and a £250 million test facility in Coventry, as it aims to reposition Jaguar in the high-end luxury market, reminiscent of its past E-Type and XJ models.
- UK retail sales fell by 0.3% in December, contrary to expectations of growth, with supermarket food sales hitting their lowest level in over a decade, while clothing and department stores saw a boost, adding to concerns about weak economic momentum at the end of 2024.
- Despite disappointing retail data, the IMF upgraded the UK’s 2025 growth forecast to 1.6%, predicting it will outpace other major European economies, but businesses remain wary of rising costs from increased National Insurance, minimum wage hikes, and inflation-driven price increases.