As we look toward 2025, the consensus is clear: artificial intelligence (AI) will continue to make waves in the global supply chain. Whether optimizing warehouse operations, improving inventory management, creating more efficient transportation routes, boosting labour productivity or mitigating disruptions, the potential benefits of AI will be invaluable for those who deploy the technology effectively.
“AI will continue to be one of the most transformative forces in supply chain management next year and beyond, driving advancements across three key areas: productivity, process, and product,” said Paul Magel, president of the business applications and technology outsourcing division at Computer Generated Solutions and its BlueCherry team.
Magel explained that AI will enhance productivity by improving day-to-day operations, introducing new tools and streamlining processes to optimize decision-making. From a product standpoint, he believes AI will remain integral to technology solutions, enhancing workflows and enabling more intelligent automation.
“AI will evolve to a point where systems can operate independently — analyzing data, solving problems and taking action without user input, leading to a more seamless and self-sufficient supply chain,” he said.
AI will also play a critical role in predicting and mitigating the impact of global disruptions, such as the Canadian rail strike and the U.S. East Coast port strike.
“Looking ahead to 2025, supply chain teams will increase their investments in AI solutions across the end-to-end supply chain, focusing particularly on improving predictive analytics and scenario planning capabilities to enhance resilience and agility,” said Jeff Trino, supply chain leader at Genpact. “While both the Canadian rail and U.S. port strikes were resolved fairly quickly, they left suppliers scrambling to reroute products. If there’s one thing 2024 taught us, it’s that supply chain disruptions will occur, and preparing for them seems to be an obvious step for suppliers to take in 2025 to stay ahead of the curve.”
Another area where AI will continue to evolve is order management.
“Traditionally, the order management process has been time- and labour-intensive. It can take hours for a human to triage a new request, interpret and classify it, match it with data and triage it before sending it to the client,” said Trino. “Now, AI agent models can auto-classify client requests, remember prior interactions and generate recommendations for the next best action, which are quickly reviewed by team members for accuracy. That’s hours of saved time across the team, allowing them to focus on more strategic, customer-facing activities.”
AI will also improve data analytics, a challenge that can be overwhelming if not done properly.
“Access to real-time visibility and predictive analytics relies on quality data and smart data management practices,” said Trino. “AI can help enrich data catalogs, cleanse data sets and detect anomalies. Organizations with AI embedded throughout the supply chain — across planning, sourcing, making, delivering and aftersales functions — can respond to disruptions more quickly and make data-backed decisions to redirect goods and inventory.”
With improved real-time visibility through better predictive analytics, demand forecasting will also be optimized, allowing companies to develop ideal stocking recommendations based on past behaviour, macroeconomic trends and other factors.
“As the predictive capabilities of AI models improve, the target level of inventory to be produced and stocked can be adjusted to maximize profitability,” said Trino.
Trends in transportation
While there are realities in the transportation sector that AI cannot change — such as distances between pickup and delivery locations, cargo weight and shipping rates — Tom Perrone, senior vice-president of professional services at project44, believes AI-driven optimization in manufacturing, production, routing and scheduling will become high-value use cases for the Canadian supply chain.
“Generative AI is becoming increasingly effective at predicting pricing, enabling businesses to optimize their supply chain vendors,” he said. “As AI makes it easier for smaller companies to enter the space, we’ll see greater diversification and, therefore, increased competition in Canadian supply chains.”
Perrone also anticipates that changing governments will impact both Canada and the U.S., from trade tariffs to the renegotiation of the U.S.-Mexico-Canada Agreement (USMCA).
“Despite calls for Canadian trade to diversify, the U.S. remains Canada’s largest trading partner, with 60 to 70 per cent of goods moving by truck,” said Perrone. “There will also be a federal election in Canada no later than October 2025, so companies may face a double whammy of regulatory changes brought on by political shifts. Canadian businesses will need to assess their risk mitigation strategies, such as alternative product sourcing, increased safety stock and diversifying their carrier network to ensure resilience in the face of inevitable disruptions.”
With the election approaching, Perrone noted that governments are promising large infrastructure projects, including improvements to the Quebec City-Windsor corridor.
“Passenger and freight trains share the same tracks, with freight taking priority over passenger commutes,” he explained. “The promise to build dedicated passenger tracks will alleviate congestion along these vital routes. While the promise of faster rail moves will benefit passengers, the improvements for freight will be even more substantial.”
On the terminal side, Perrone expects the Port of Prince Rupert to increase its capacity to 1.8 million TEUs, while Vancouver plans to add 2.4 million TEUs annually. The Port of Montreal is also slated for a potential expansion.
“These developments are heavily influenced by mode shifts to greener transportation methods, capacity requirements, and changing consumer needs,” he said.
A persistent challenge in the trucking industry, as Perrone points out, is the labour shortage, which accounts for 63 per cent of open positions in the logistics sector.
“This is putting pressure on smaller companies, where unfilled positions can significantly impact revenue, particularly in sectors reliant on long-haul transportation,” he said. “Without increased recruitment and retention efforts, projections suggest that vacancies in trucking and logistics could surpass 25,000 positions in the coming years, potentially compromising supply chain efficiency and economic productivity across Canada.”
“AI will continue to be one of the most transformative forces in supply chain management next year and beyond…”
– Paul Magel, president of the business applications and technology outsourcing division at Computer Generated Solutions and its BlueCherry team
Warehouses
Warehouse operations are among the largest adopters of AI and robotic technologies. Bill Stenger, head of sales for the Americas region at Swisslog, said there is a shift toward highly adaptable technologies that use data to drive greater efficiency.
“Collaborative robotics will play a key role in adapting to labour availability and productivity challenges,” said Stenger. “These technologies will allow operations to run longer, helping meet customers’ expectations for service levels.”
Stenger also emphasized AI’s growing importance in addressing the global labour shortage.
“You don’t have employees with 10, 15 or 20 years of experience who know the ins and outs of operations,” he said. “We need to empower employees who will be with us for one, three or five years with data and decision-making tools. AI will play a crucial role in providing suggestions to operators, helping them make smarter decisions and boosting their confidence.”
Sustainability
Perrone noted that many companies are realizing that sustainability also drives operational efficiency.
“Today, ESG (environmental, social, and governance) concerns may feel imposed through regulation and external pressures, but over the long term, logistics companies will see sustainability as a crucial source of savings and a competitive advantage,” he said.
Magel echoed this sentiment, adding that technology helps improve efficiency across the entire supply chain, enabling manufacturers to produce less and create less waste.
Magel believes government will continue to play a role in shaping companies’ approach to sustainability, alongside pressures from customers and internal operations.
“As such, technology will remain essential for collecting, parsing and sharing data in the required formats,” he said. “Whether it’s the government, your customers, or your own company, technology will be vital for tracking the vast amounts of data involved.”
However, Perrone pointed out that one area where the supply chain sector is lagging in sustainability is the electrification of trucking fleets.
“While EV technology has spurred innovation in sustainable transportation, the lack of charging infrastructure remains a barrier to adoption, especially for heavy trucks,” said Perrone. “In 2025, with Canada’s vast, sparsely populated landscape, I expect more research and investment in alternative fuels and clean energy sources beyond just electrification.”
Magel expects the consumer products industry to continue leading the way in adopting advanced supply chain technologies. He noted that sectors like fashion, footwear and accessories face increasing pressure from compliance requirements related to labour and material sustainability, while customers continue to demand lower-cost goods. Technology will help companies address these challenges.
The bottom line
AI and other technologies are generating significant buzz about their potential to help supply chains navigate the challenges of 2025. But, as Trino cautions, one of the biggest challenges suppliers will face is separating the hype from the reality of what AI can deliver.
“There’s plenty of opportunity for success, but also a lot of hype that could lead to failed initiatives. It’s important to have a team that understands the technology and sets realistic expectations for what it can do today,” he said. “AI initiatives should be driven by clear business objectives. It’s essential to identify areas where AI can have the most impact and align these with strategic goals.”
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