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Brexit Uncertainty a Boon for European, UK Self-Storage, Warehousing Businesses

Uncertainty surrounding Brexit has been a boon for self-storage and warehousing businesses in Europe and the United Kingdom, according to a recent article in “Descrier,” a U.K. news and culture magazine. With the U.K. scheduled to leave the European Union (E.U.) on Oct. 31—the third target date since voters approved a 2016 referendum—businesses have used storage facilities to stockpile inventory on products ranging from food to textiles in case there are port delays following the U.K’s withdrawal. The free flow of goods to and from the U.K. is expected to slow as the result of Brexit, particularly if there isn’t a signed deal between the E.U. and U.K., the source reported.

Self-storage operators have benefited primarily from small and mid-sized businesses, which have used storage facilities as a way to mitigate pressure on imports. Using self-storage provides businesses a degree of cost stability, since changes to import tariffs after Brexit remain unclear.

Leading up to the first “Brexit Day” in January, about 75 percent of British warehouses were at full storing capacity, and prices increased 25 percent due to an influx of Brexit-related inquiries. Amazon suggested U.K.-based sellers should consider moving inventory to European warehouses to avoid shipping delays, according to the source.

The Oct. 31 deadline is also problematic because it coincides with seasonal storage needs related to Black Friday, Cyber Monday and the Christmas season. Many retailers use warehouses and self-storage facilities for additional inventory needs during the fall to meet anticipated orders.

“In previous years, these peaks have become increasingly challenging with rising labor and skills shortages in our industry,” said Peter Ward, CEO of the U.K. Warehousing Association. “This year is likely to be exponentially more difficult, as members contend with not only shortage of warehouse space, but the ‘Brexodus’ effect of E.U. workers going home or heading to other E.U. markets.”

Source:
Descrier, Brexit Stockpiling Puts Pressure on UK Warehouse Space

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