Business across the UK are struggling with an economic downturn and the uncertainty of Brexit, but the difficult economic times have been a boon for one sector: storage.
As the UK approaches its third so-called “Brexit day” on 31 October, Britain’s warehouses are once again filled to near-capacity thanks to businesses stockpiling goods in case of delays and holdups at ports in the event of a no-deal exit from the European Union. Businesses are choosing these facilities to store a broad variety of goods ranging from food produce to clothes in an effort to ensure stocks do not run low if the UK’s new relationship with the EU results in a slowing of the free flow of goods into the country.
In the days prior to the first Brexit day back in January, about 75 percent of warehouses were unable to take on more business from new customers, and prices soared by up to 25 percent in the wake of a surge in Brexit-related inquiries. The fear of delays at the border caused internet retailer Amazon to suggest to some of its UK-based sellers that they should consider moving their stock to European warehouses to avoid disruption.
Whilst supermarkets such as Tesco have rented containers outside its largest stores for the rest of the year to stockpile additional groceries, small and medium-sized businesses have looked to the self-storage industry to help them create a buffer of supplies that could help ease the pressure on imports should Brexit happen in three weeks. Stockpiling at a self storage facility also gives businesses some degree of cost stability, with it currently unclear what tariffs importing such goods and materials could attract if Britain crashes out of the EU trading bloc without a deal.
However, the October Brexit date comes at a difficult time for companies looking to stockpile supplies as storage space is at a premium in the last quarter of the year with many retailers already utilising third-party storage facilities to hold additional stock in preparation for the Christmas period.
Peter Ward, CEO of the UK Warehousing Association, explains: “The 31 Oct deadline couldn’t have come at a worse time, clashing with peak season in logistics in the run up to Christmas, including Black Friday and Cyber Monday. In previous years, these peaks have become increasingly challenging with rising labour and skills shortages in our industry. This year is likely to be exponentially more difficult, as members contend with not only shortage of warehouse space, but the ‘Brexodus’ effect of EU workers going home or heading to other EU markets.”