Tesco goes to overnight rail at expense of overnight restocking
The UK’s biggest private-sector employer, the supermarket chain Tesco, has stepped up its overnight rail freight capacity, and is now delivering refrigerated produce as well as ambient temperature goods via its extensive rail operations. The company recently enhanced its relationship with rail freight carrier DRS, blaming the ongoing road driver shortage as the main reason for the decision. However, union sources have bemoaned the potential loss of jobs within the retail operation.
The good news for rail freight has been tainted by the admission from Tesco that it will be shedding 1600 jobs, by restructuring its mode of overnight operation and other changes. The increased reliability of rail freight, and the acquisition of refrigerated containers, means Tesco can better manage round the clock supply operations, without recourse to routine night shelf stacking. Tesco does however hope to redeploy staff within the company.
highly competitive and fast-paced
Tesco’s big blue trains have been as much part of the British retail scene as their big blue stores, and for almost as long. However, the culmination of factors – including a disrupted supply chain, Brexit shortages, and a continuing shortfall in heavy goods vehicle drivers, have all converged, persuading Tesco and other large retailers to reconsider rail freight options.
Speaking in an interview to the retail sector, Tesco’s cheif in the UK, Jason Tarry, said the supermarket sector was highly competitive and fast-paced. “Our customers are shopping differently, especially since the start of the pandemic. We are always looking at how we can run our business as simply and efficiently as possible, so that we can re-invest in the things that matter most to customers. The changes we are announcing today will help us do this. Our priority now is to support our impacted colleagues through these changes and, wherever possible, find them alternative roles within our business.”
Winning in the toughest of circumstances
As previously reported, Tesco has been transporting consumer goods and ambient groceries by rail for many years, in a current partnership with Direct Rail Services – the general freight arm of the specialist carrier Nuclear Transport Solutions. The longevity of the partnership has been all the more remarkable in the face of the fiercely competitive supermarket sector.
Despite the perfect storm of economic conditions, rail freight has won out in the toughest of circumstances. “The environmental and socioeconomic benefits of using rail are well proven”, said Chris Connelly, NTS deputy CEO and rail director, with responsibility for DRS operations. Most observers agree that it is only a matter of time before more retailers follow the Tesco lead – at least the lead into greater use of rail freight as their distribution solution.