Loblaw hikes supply chain charges for its suppliers as transportation costs rise

Loblaw Companies Ltd. is raising the supply chain handling fees it charges suppliers of its grocery and drugstores.

In a letter to suppliers dated Oct. 3, the company said it experienced significant year-over-year increases in many of its supply chain costs, including higher "cartage'' or freight costs.

Loblaw said its fees will go up Jan. 1, 2023, with distribution centre delivery charges increasing to 1.17% and direct-to-store delivery charges rising to 0.36%.

Loblaw vice-president of communication Catherine Thomas says at this time of year, the company advises its suppliers of fees to move goods through its network for the following year.

"This includes situations where we pick up, ship and deliver their goods for them,'' she said in an emailed statement.

"Our costs for handling this business have gone up and consequently we are notifying suppliers of some adjustments to the fees, if they choose to use these services.''

Earlier this week, Loblaw announced it would freeze prices on all its in-house No Name products until Jan. 31, 2023, in an effort to help customers grappling with inflation.

Critics warned the company could look to recoup profit losses elsewhere.