Southgate Global Shares Industry Predictions for 2025

The
last twelve months has brought significant political and economic change
globally. Major shifts in power in the US and the UK, coupled with a
significant overhaul to economic policy has led to uncertainty for many
businesses heading into the new year.

Southgate
Global shares its expectations and predictions for those
operating in the supply chain, and how organisations can best adapt to these in
2025.

Rising
Costs

The
new Labour government’s October budget has meant rising costs for businesses
operating across all sectors in the UK. The increase in Employers’ National
Insurance Contributions (NICs) from 13.8 per cent to 15 per cent along with an
upcoming rise to the minimum wage in April, has added a significant financial
burden on the upfront running costs for organisations, with some specifically
impacting the supply chain.

From
April 2025, it’s expected that employers will have to pay an additional £770 in
NICs for each minimum wage worker, or an extra £900 for each employee on median
earnings. These changes have left many organisations looking for ways to cut
costs or look at increased efficiencies.

While automating
operations can help reduce labour costs significantly in the long term, for
many companies, the expected ROI from automation projects is too low according
to McKinsey and Company, with the payback period more often longer than the
lease on the warehouse being automated.

According
to Southgate Global, organisations will instead look at how they can improve
the efficiency of their warehouse operatives and maximise their productivity.
Southgate understands that automation is not a ‘one-size-fits-all’ solution. Instead,
by optimising manual tasks through innovative but relatively inexpensive equipment
when compared to automated alternatives and ensuring the interface between warehouse
operatives and implemented automation is streamlined, companies can enhance
productivity and ensure they are running at optimum efficiency.  

Iain Lennard, Chief
Commercial Officer at Southgate Global, said: “Rising costs will be a problem
for every business across any sector in 2025. So, it is more important than
ever for organisations to ensure that their people and equipment are maximised.

“We’re
expecting businesses to undertake significant reviews of how they’re currently
operating, and in doing so, identify any major touchpoints costing them time
and money. This could take a variety of forms, from reviewing equipment
readiness to analysing workflow processes.”

This
is an area that Southgate works hard to offer solutions to in both its Design
Service Team, which helps to identify bottlenecks and streamline workflows, and
its equipment provision. For example, its Mobile Powered Workstation (MPW) is
specifically designed to boost workforce productivity. With its own integrated
power system used to power laptops, barcode printers or scanners, the MPW
allows operatives to walk and work anywhere in the warehouse, maximising
efficiency and streamlining workflows.

Logistics
and Supply Chain Challenges 

Global
instability has also caused uncertainty within the supply chain over the last
year, which is expected to continue well into 2025. War in the Middle East and
Eastern Europe has placed an additional strain on organisations internationally,
impacting key shipping routes. For example, the rerouting of ships around
Africa’s Cape of Good Hope equates to a roughly 30 per cent increase in transit
times.  This has impacted the supply chain on an
international level and added substantial additional cost and time pressures on
businesses.

Gavin
Rawson, Head of Logistics at Southgate Global said: “Global instability is
likely to continue well into 2025, sustaining the current increase in lead
times to Europe from Asia and adding to global shipping challenges.

“Southgate
has navigated this too through forward planning, ensuring it has the capacity
to carry a greater volume of stock of material handling equipment and packaging
equipment, as well as diversifying its sourcing strategy, bypassing many of these
supply chain issues and related costs.

“In
terms of UK trends and impacts, transport companies are struggling to cope with
the reduction in volumes following the post-pandemic boom and several have gone
out of business as a result.  Therefore,
innovation will remain a priority, players investing in improved shipment
tracking and communication, as well as greater choice for customer consignments
such as smaller vehicles or vans will be the winners.”

Southgate
is facilitating these market changes with products such as its Dock Levelling
Ramp designed to enable vans and trucks up C1 7.5-tonne classification to
easily access full-sized loading docks. In recent years vans have become one of
the fastest-growing category of delivery vehicle. So the Southgate Dock
Levelling Ramp, together with the Southgate Van Loading Trolley solution, not
only speeds up cargo handling times but also ensures fewer final mile journeys
with more optimally loaded vehicles.  “This
provides logistics operations greater agility, affordability, faster delivery,
and improved sustainability. A real win snatched from adversity,” he concludes.

Sustainability

Following
the United Nations Climate Change Conference (COP29), where global leaders
discussed sustainable development, there is now even more of a pressing focus
on organisations to consider how they can operate more sustainably. And with
warehousing activities contributing roughly 11 per cent of the total GHG
emissions generated by the logistics sector across the globe,
it’s more important than ever for businesses to consider how they can
incorporate sustainable practices into their warehouse workflow.

Heading
into 2025, Southgate Global predicts its customers will shift their focus from
replacing broken or damaged parts in machinery and equipment to repairing them
instead. Harshad Gorasia, Chief Operating Officer at Southgate Global noted: “Sustainability
has become an integral part of business strategy. Companies will focus on
reducing carbon footprints and using recycled materials. This in part will be
pushed by government regulation as well as business customers and consumers becoming
more prescriptive on what and how they expect suppliers to behave. However, cost
reduction will still be a major consideration when it comes to the final
decision. Nevertheless, given that sustainable practices can also lead to
reduced capital costs in some instances, it is clear why this will be a trend
into 2025 and beyond.”

According
to Southgate, while it has previously been the default response to replace
rather than repair equipment such as trollies and carts, the feasibility of
repairing means it will become a first response. For example, Southgate’s
Technical Services Team offers servicing for packing and material handling
equipment, whether the product is supplied by Southgate or not, as well as
renovation and repair services, helping its customers meet their specific
fulfilment challenges while reducing their impact on the planet.

The
new year will bring new pressures, priorities and demands for all businesses in
any sector. It’s now more important than ever for organisations to be ready to
adapt and plan ahead to mitigate operational challenges in 2025.