Arla Foods and XPO Logistics to consolidate UK chilled pallet distribution into one CDC

What’s happening: a single hub for Arla’s chilled pallet goods

The plan to develop a new UK central distribution centre (CDC) that will handle all of Arla Foods’ chilled palletised products by late 2027 is now confirmed.

Why consolidation makes sense

Consolidating many regional chilled operations into a single, modern CDC reduces complexity. Bringing products like cheese, butter and yoghurts under one roof simplifies forecasting, inventory control and pick-and-pack flows. It’s the logistics equivalent of cleaning out a crowded garage: once everything’s in one place, you see what’s missing and what’s redundant.

Location and connectivity

The site is being developed at Prologis RFI DIRFT in Northamptonshire, adjacent to the national motorway network (M1 J18) and the West Coast Main Line. This combination of road and rail access is a classic win for distribution: quick motorway access for regional hauliers plus rail connectivity for longer distance and intermodal flows.

Partnership and operational model

The CDC will be delivered in partnership between Arla Foods, XPO Logistics and Prologis. XPO will not only support day-to-day operations but also lead project management and long-term site operation, leveraging its experience in transformation, automation, and scalable operating design. In short, Arla outsources the heavy lifting of design and operations to a specialist that can scale with demand.

• XPO Logistics provides transformation and automation expertise.
• Prologis supplies the strategic real estate and access to transport networks.
• Arla Foods concentrates product expertise and demand planning.

Technology, efficiency and sustainability

The CDC is described as “future-ready,” which generally signals automation, mechanised cold-chain handling, and data-driven warehouse management. These investments typically translate to better throughput and lower unit costs, and — crucially for chilled goods — less waste due to improved temperature control and faster cycle times.

Consolidation also reduces road miles when distribution is optimised, but that depends on routing, carrier networks and whether smaller cross-docks are closed. As Fran Ball, SVP UK supply chain for Arla Foods UK, noted, the aim is improved resilience and reduction of waste and road miles — a clear sustainability angle with operational benefits.

Scale of investment and wider context

This CDC announcement follows recent sizable investments across Arla’s UK operations, including a €107.7m investment at Arla Lockerbie and more than €355m across five UK sites announced in 2024. These moves point to a heavier emphasis on local manufacturing and distribution capacity in the UK market.

Practical implications for logistics providers and shippers

For carriers, retailers and 3PLs, a single CDC means clearer routing patterns into Arla’s distribution footprint, potential for longer, fuller loads into the CDC, and more predictable outbound flows to retailers. For local last-mile delivery, it could mean changes in where palletised consignments are received and dispatched.

• Carriers can plan more consistent daily runs to DIRFT.
• Shippers may find improved lead times but should prepare for different receiving windows.
• Retailers could benefit from more stable service levels and less product variability.

Ryzyka i uwagi

Centralisation brings advantages but also concentration risk: a single-site failure—whether due to technical, weather or labour issues—can disrupt a much larger portion of the supply chain. Mitigation will require robust contingency plans, backup capacity and strong supplier communication channels.

Also, the benefits on road-mile reduction depend on the actual network redesign: if shorter, regional hubs remain in parallel, the carbon and mileage gains could be modest. The devil, as they say, is in the details.

What this means for daily operations

Expect phased transitions, new IT and WMS integrations, and a period where teams learn new processes. Training, change management, and clear SLAs will be essential to avoid bumps in service during the migration to the new CDC.

Kluczowe wnioski

In plain terms: Arla Foods and XPO Logistics are betting that a single, modernised CDC at DIRFT will deliver resilience, efficiency and sustainability improvements for chilled dairy distribution in the UK. The move connects high-quality cold storage with strategic transport links — a combination that logistics professionals should watch closely.

Highlights include:

• Centralised chilled handling to streamline pallet flows.
• Strategic DIRFT location for road and rail access.
• XPO-managed operations with a focus on automation and scalability.
• Large capital commitments across Arla’s UK network, signalling long-term intent.

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In summary, the CDC plan promises to reshape how Arla moves chilled goods across the UK, with implications for freight routing, pallet volumes, haulage scheduling and last-mile distribution. Consolidation should yield efficiencies, reduced waste and improved service if executed well, but it also requires contingency planning to avoid concentration risk. For logistics and transport professionals, this is a reminder that modern distribution increasingly blends estate strategy, automation, and transport planning into one coordinated approach. GetTransport.com offers an efficient and cost-effective way to manage cargo, freight, shipment and delivery needs—whether you’re moving pallets, containers or bulky items—making it easier to connect with reliable carriers and optimise forwarding, dispatch and haulage across national and international lanes.