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UK warehouse space nears capacity as firms stockpile for Brexit

The Guardian logo The Guardian 21/01/2019 Sarah Butler
a sign on the side of a building: Businesses are seeking storage for goods ranging from food ingredients to cat food, packaging materials and finished consumer products. © AFP/Getty Images Businesses are seeking storage for goods ranging from food ingredients to cat food, packaging materials and finished consumer products.

Three-quarters of UK warehouse owners say their space is full to capacity and storage costs have soared by up to 25% in the past three months after a surge in Brexit-related inquiries.

The UK Warehousing Association (UKWA), whose 750 members have more than 9.3m sq metres (100m sq ft) of space nationwide, said there was a shortage of space close to major cities for stockpiling goods in case of holdups at ports after a no-deal exit from the EU.

A survey of UKWA members from across the country last month found 85% had received Brexit-related inquiries. About 75% were unable to take on more business from new customers.


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Businesses have been seeking storage for goods ranging from food ingredients to cat food, packaging materials and finished consumer products in an effort to ensure stocks do not run low in the event of no deal or any deal with the EU that slowed up the free flow of goods.

Richard Perriman, the UK supply chain development manager at Horizon Cargo, which has a 7,430 sq metre warehouse with space for up to 6,000 pallets near the M20 access route to Dover, said the facility was now slightly over capacity having been only half full when it opened in 2017.

© Getty “We have seen more unsolicited inquiries from people out of the blue looking for space. We’re having almost daily conversations with clients about the impact of Brexit on them.”

He said the company had a big increase in inquiries starting in August last year and was now receiving three to four a week compared with one or two a month previously. He said Horizon had been asked about storing a wide variety of goods including carpet tiles, telecoms equipment and food.

Peter Ward, the UKWA chief executive, said: “We are facing a perfect storm in the warehousing and logistics industry.” He said the prospect of a no-deal Brexit had ramped up demand at a time when few developers had been building warehouse space without confirmed tenants because urban land was being prioritised for homebuilding. At the same time demand for space was rising from online retailers while warehouses faced a “severe labour and skills shortage” as workers from eastern Europe headed home after the Brexit vote.

© Getty Industry sources said the cost of warehouse space had risen by as much as a quarter in the final three months of 2018 as fears of no deal exacerbated capacity problems caused by rising demand from online retailers.

It is understood that pharmaceuticals storage, which is handled by five specialist licensed operators in the UK, is at capacity while frozen and chilled food warehouses, storing everything from garden peas to half-cooked supermarket bread and cold-store potatoes, are fully booked until beyond April.

The Food Storage and Distribution Federation (FSDF), which represents 350 warehouse owners and 75% of all commercially available frozen and chilled food warehouses in the country, said its members were turning customers away.

© Getty Tesco has rented frozen food containers outside its largest stores for the rest of this year. It normally only uses the containers to cover high demand over Christmas.

Earlier this month Amazon wrote to UK-based traders who sell on its platform to suggest they consider sending stock to its continental European warehouse to prevent any export delays.

Companies ranging from the carmaker Bentley to pharmaceutical firms such as GlaxoSmithKline and Sanofi, the folding bike maker Brompton and Premier Foods – which makes Bisto, Sharwood’s and Mr Kipling – have all announced plans for stockpiling.

© Getty One warehousing expert told the Guardian that major pharmaceuticals, alcohol, tobacco and car firms had put plans in place early as their products were both expensive and long-lasting, meaning any storage costs incurred could be more easily absorbed.

But he said it was much more difficult for food companies to stockpile because of their products’ shorter shelf life and lower prices. “It costs the same price to store a pallet load of crisps as a pallet load of whisky,” he said.

Related; Facts to know about Brexit (Photos)


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