// Tesco suppliers expected to face additional transport costs
// The grocer opted to impose price hikes following the ongoing driver shortage
// The new costs will affect Tesco’s primary distribution rates
Tesco expects suppliers to be affected by additional transport costs after it opted to impose price hikes following the ongoing driver shortage.
The new costs will affect Tesco’s primary distribution rates, a service run by the supermarket that brokers third-party hauliers to collect goods from supplier depots and transport them to its distribution centres.
Haulage companies have been increasing their rates over the last two months in order to cover the rising costs of driver wages.
Tesco told suppliers that it will apply an additional 14 per cent surcharge on primary distribution rates.
The surcharge will run from August 1 until December 31, although Tesco later confirmed it intends to review the rate in three months.
Tesco said the price change “went through an independent process to agree rates that are competitive for the market”.
“We are doing everything we can to manage the current challenges facing the logistics industry and ensure our customers are able to get the products they need,” the grocer said.
Tesco has opted to increase its use of rail for importing food from Europe, and improved efficiencies through means such as reducing the time drivers spend at depots.