LONDON: Supermarket giant Asda has worked around its logistics problems in the north east by signing up a deal with PD Teesport for a deep sea container facility which will be used to distribute non-food products. As part of the deal, it will also build a £20m import centre at Teesport near Middlesbrough that will help create 300 jobs.

It is being hailed as a landmark deal for the ports industry and expected to change the economy of the region, as other retailers may be inspired to follow the Asda example.

Asda will begin by building a 360,000 sq ft warehouse building on the 18-acre site at the port. Construction is expected to be completed by February 2006. Once the logistics operations are in place, another 150,000 sq. ft. facility will be established on an additional 5.6 acres plot.

With the north east port facilities Asda will be able to save two million road miles a year by shipping over two-thirds of its distribution direct to Teesport. The supermarket chain receives its stock from various international destinations at southern ports from where it is then transported by road to distribution centres in the north. This roundabout distribution route will end once the deep sea container facility and the warehouse are operational.

Besides enabling Asda to distribute its non-food stock to its stores throughout the UK, the rerouting will also help ease the congestion in southern ports like Southampton and Felixstowe.

The supermarket giant is owned by US-based retail chain Wal-Mart.