Automation and AI in the supply chain
While automation in the supply chain has been optimised by organisations for decades, rapid technological advancements in recent years have allowed businesses to make major leaps in their productivity and efficiency.
Southgate Global, a specialist in packing equipment, consumables and servicing for operational logistics and fulfilment, predicts 2026 will be no different, with the biggest shift expected to be in the level of transparency in the supply chain, with more businesses adopting real-time asset and shipment tracking to predict and avoid delays – both in transit and in the warehouse.
Frequently used intermittent tracking, such as scanning a package at major hubs, can only provide a snapshot in time. While this data is beneficial for customer service, it has little use for modern supply chain resilience.
Artificial intelligence (AI) can be used to predict delays and execute a fix, significantly reducing bottlenecks.
Dan Banks, Key Account Director at Southgate, noted: “Companies that have yet to fully embrace real-time asset and shipment tracking are not just a step behind; they are fundamentally missing the prerequisite for the next generation of logistics.
AI will also have a greater use in the movement of goods around the warehouse, connecting disparate data streams, such as asset tracking, to execute real-time decisions, such as automatically reallocating stock across a warehouse. Knowing the precise location and status of your inventory, such as roll cages and trolleys, helps to minimise asset loss, improve turnaround time, and reduce downtime.
Banks added, “A company without robust tracking is operating with a data deficit. Every hour of non-tracking is an hour of lost data on typical routes, latency patterns, idle times, and micro-delays.
“This missing historical data prevents the AI from building accurate predictive models, meaning they can never truly move into proactive orchestration.”
Rising costs and CapEx reductions
With increases to the UK National Minimum Wage coming into force in 2026, the cost of labour has continued to be a hot topic for businesses this year. Combined with inflation pressures, looking for ways to cut spending and improve efficiency will be a key target for organisations in 2026.
The New Year brings a first relief from “peak”, offering the opportunity to reflect on the last few months, identify what has worked well, and what could have been done better.
Peak puts a strain on operations and can often exacerbate existing pain points and bottlenecks. For example, if equipment such as trolleys or cages is damaged or broken, the impact can be detrimental, with downtime significantly eating into profits.
John Maher, Head of Servicing at Southgate, explained: “In 2026, I [re]commend you do things differently, as CaPex will be a luxury, not a given.
“Think of your own assets, your car in particular. You wouldn’t drive your car without regular servicing.
“That’s why it’s essential to invest in a professional maintenance programme to extend asset life, reduce downtime and cut your costs next year.”
Over the next 12 months, businesses will continue to adopt a mindset of repair or repurpose before replacing both material handling equipment and machinery. Specialists, such as Southgate’s Technical Services team, can carry out comprehensive assessments, looking closely at equipment inventories to create a customised maintenance programme to match specific needs and budgets.
Sustainability expectations
With global leaders coming together at COP30 to discuss key environmental plans and developments – and governments introducing tighter legislation for organisations operating in logistics, packaging, retail and e-commerce – sustainability is set to be a priority for businesses over the next year.
Catalina Aldoiu, Head of Supply Chain at Southgate, believes the focus is shifting from sustainability being simply a box-ticking exercise to organisations having higher expectations of both themselves and their suppliers: “It’s no longer about being green at any cost, but about adopting sustainability while still maintaining the same level of performance, and no additional costs.”
This is particularly prevalent in the packaging industry, with new Extended Producer Responsibility (EPR) regulations coming into force this year, with some businesses having to pay a fee for the packaging they supply to or import into the UK market.
Alongside this, the Plastic Packaging Tax (PPT) continues to bring an extra level of complexity for organisations, with time-consuming and admin-heavy verification processes.
To combat this, businesses will be looking to adopt more sustainable materials in packaging. In 2025, for example, Southgate introduced its first Global Recycled Standard (GRS) certified product range, which customers can be assured meets the requirements to avoid PPT.
Louise Rix, Category Manager at Southgate, added: “Businesses will be looking for certainty around sustainability, and require proof that products meet relevant requirements and standards.
“It’s vital suppliers like us acknowledge this and help our customers support the circular economy.”
As businesses look ahead to 2026, there is a growing need to manage rising costs, operate more sustainably and adopt new practices and automations to keep their competitive edge. It’s now more important than ever for businesses to be forward-thinking, adaptable and innovative.