In a vast warehouse complex 40 miles north of London, staff are wrestling with ways to cram in more goods after a surge in demand from companies building stockpiles ahead of Brexit.
Efforts at Miniclipper Logistics to add new racks by narrowing the aisles are being duplicated across Britain as Brexit contingency plans spark a race for storage space. The company, which after adding a mezzanine floor and a temporary warehouse has 3,00,000 square feet of capacity, has already had to turn new business away.
“Almost every day we receive another inquiry regarding Brexit,” sales director Jayne Masters told Reuters.
“We have customers queuing up to move goods in.”
The world’s fifth-largest economy risks stumbling into a disorderly exit from its biggest trading partner, the European Union, if Parliament votes down Prime Minister Theresa May’s withdrawal agreement on December 11.
Business leaders fear that would lead to border checks, blocked ports and major tailbacks on the roads, threatening the $540 billion worth of goods that move back and forth between the two and damaging major companies such as GSK and Unilever.
As a result, companies from Rolls-Royce and Airbus to retailers, manufacturers and food and drink groups have all said they are building up stock ahead of Brexit on March 29.
A closely watched industry survey showed stockpiling was one factor driving output in November.
But in an economy built on production cycles that run to the minute, and where storing stock wastes time and money, warehousing is in short supply and prices are rising.
Owners of frozen and chilled storage space say they are fully booked until the middle of next year. And the government has had to request more secure storage for medication be built after it discovered that an order for all drugmakers to hold six weeks of supply could not be met.
“This is introducing extreme stress into the system,” Mike Thompson, head of the Association of the British Pharmaceutical Industry (ABPI), told Reuters.
Strong demand
According to the Bank of England, large corporates are more active than small in preparing for up to a month of disruption.
Companies are seeking space for around six months to one year, enough to see them through Britain’s departure, but much less than the normal contracts of five years.
Charlie Pool, head of online warehouse marketplace Stowga, says there is enough ambient storage in Britain. It just might not be in the right location, increasing costs for business.
“Any company that dithers is increasing their costs,” he said. “They may not end up in the right location, and prices are going up.”
According to Stowga, the national average price has risen from around £1.85 per pallet per week in September to over £2 pounds now. In London, that price is much higher.
Where Stowga traditionally dealt with small and medium-sized companies, in the last month they’ve been working with big household names.
The surge in demand for storage space, spurred by a groundswell of protest against Ms. May’s deal in Parliament, has coincided with the Christmas rush.
Lack of supply
Backers of Brexit have always accepted that the economy would take an initial hit as it embarks on the biggest shift in foreign and trade policy since World War Two, but say it will benefit from new trade deals in the long run.
For British businesses however, preparation has been frustrated by the fact they will not know the terms of any post-Brexit trade deal until close to the departure date.
Wincanton’s Colman said six months ago clients felt there were too many potential outcomes to prepare for. While that uncertainty remains, they now have to act.
But around London and in central England it is becoming hard to find enough vacant space after developers focused in recent years on building warehouses for e-commerce giants like Amazon and supermarket Tesco.
