FourKites: Cybersecurity, AI and resilience take centre stage in 2025
The supply chain industry stands on the brink of transformative change in 2025, with emerging technologies, cybersecurity challenges, and geopolitical uncertainties reshaping the landscape.
Cybersecurity has become a critical imperative, according to Matt Elenjickal, Founder and CEO of FourKites. “Investment in cybersecurity is no longer an option in 2025,” he warns.
“Protection against cybersecurity incidents, which are becoming more frequent and severe, needs to be a top priority for the supply chain industry.”
The rise of artificial intelligence (AI) is set to be a game-changer, with Elenjickal predicting a surge of innovative market entrants.
“AI is accelerating innovation in the supply chain industry with the potential to leapfrog incumbents,” he notes. “Do not underestimate the threat of a potential surge in new companies as VC funding and investments in supply chain companies and technology continue to increase.”
Automation remains a critical yet sensitive topic. Elenjickal argues that “AI and automation are not the enemy and have the potential to create new jobs and improve existing roles, especially when it comes to worker safety.”
He emphasises that for companies to fully benefit from these technologies, they “must invest in upskilling their employees.”
Stephen Dyke, Principal Consultant Manager at FourKites, highlights the growing importance of IoT standardisation.
“Recent large scale foodborne illness outbreaks like those at McDonald’s and others are driving an increased focus on traceability and transparency,” he explains. As a result, companies are likely to increase investments in technologies that provide better tracking and monitoring capabilities.
The global economic landscape presents significant challenges.
“Geopolitical tensions and economic recovery will be the biggest risks to global supply chains in 2025,” Dyke cautions. Manufacturing growth indicators are down, and inflationary pressures persist. He predicts that “carriers will seek recovery and leverage with rates and capacity needs.”
Data emerges as a critical asset, with Dyke noting,
“Everyone is rich in data, it’s time to normalise and adapt ‘train’ AI into driving operational automation tasks and being directed by human-based decisions.” This approach is crucial for operational efficiency.
Perhaps most significantly, Dyke declares that “2025 is the year that ‘Supply Chain Resiliency’ becomes the norm.” He anticipates increased investments in Centers of Excellence and AI technology, recognizing that what were once considered extraordinary events “are now a constant consideration for supply chain planning and execution.”
The reshoring trend continues to gain momentum, with potential profound implications for global supply chain structures. As Dyke puts it, we’ll “continue to see a trend toward reshoring, which will have an effect on centralisation within applications and logistics networks.”
Ti: Road freight rates to remain high amid rising costs
According to the latest report from Ti, European road freight rates remained relatively stable in Q3 2024 due to weak short-term demand. However, persistent inflationary pressures and structural cost increases are expected to drive rates higher in the coming months. Despite a gradual recovery in consumer confidence across Europe, it remains below pre-pandemic levels, signalling a cautious economic outlook.
Several supply-side and demand-side dynamics are influencing road freight rates. On the supply side, a slowdown in new truck capacity is becoming evident. EU truck registrations declined by 7.5% from January to September 2024, driven by a 9.5% drop in heavy-truck sales, limiting new capacity entering the market. This slowdown has contributed to upward pressure on freight rates. Additionally, the average age of trucks in the EU is now 14.2 years, with approximately 6.5 million trucks in operation, as carriers hold onto vehicles longer due to regulatory changes and cost considerations.
On the cost side, tyre prices are poised to rise due to a new EU regulation banning non-compliant natural rubber imports, which will further extend to SMEs by 2025. Although diesel prices showed a downward trend in Q3, they remain volatile, with high inflation and elevated energy costs continuing to strain operational budgets. Producer prices rose to 124.9 points in Q3, reflecting ongoing pressure on production sectors, exacerbated by supply chain disruptions like the Red Sea crisis.
Despite softer demand, structural increases in operational costs, such as diesel, insurance, maintenance, and tyres, have kept freight rates well above 2021 levels. This trend underscores the resilience of cost pressures in shaping the market, counterbalancing the effects of declining demand.