Driver shortage forces Tesco to increase supplier costs

Tesco is reportedly planning to hit suppliers with extra transport costs due to an ongoing driver shortage.

Tesco has opted to impose a price increase for its primary distribution rates, a service run by the supermarket retailer that organises third-party logistics companies to pick up goods from supplier depots and transport them to its distribution centres, according to a report by The Grocer.

The supermarket told suppliers in a letter that an additional 14 per cent surcharge would be added to the rates.

Haulage companies have been hiking their rates over the past couple of months. In May, Logistics UK said hauliers had no choice due to the pandemic, Brexit, climate crisis, and other international pressures.

In a letter, the supermarket told suppliers that an additional 14 per cent surcharge would be applied to primary distribution rates.

A Tesco spokesperson told The Grocer that 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,” they added.

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