Brexit stockpiling ‘good news’ for UK warehouse sector

Updated January 09, 2019

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The secure warehouse is open 24 hours a day, 7 days a week and is packed to its 13-metre (43-foot) high ceiling with cosmetics, food and computer products. ─ Reuters/File
The secure warehouse is open 24 hours a day, 7 days a week and is packed to its 13-metre (43-foot) high ceiling with cosmetics, food and computer products. ─ Reuters/File

CRICK: Fears of a chaotic Brexit are “good news” for Neil Powell, a British warehouse business manager who has seen a boom in orders from companies stockpiling to avoid supply problems.

“Usual capacity would be about 85 per cent to 90pc, it is 94pc at the moment,” Powell, general manager of the NX Group in Crick in central England, told AFP.

Brexit “is good news for us,” he said, as handlers shifted pallets in one of the company’s three warehouses.

“Customers are demanding a lot more space,” he said.

The secure warehouse is open 24 hours a day, 7 days a week and is packed to its 13-metre (43-foot) high ceiling with cosmetics, food and computer products.

The company has a total storage capacity of around 9,300 square metres in this warehouse-filled area of the Midlands known as the “golden triangle” of logistics, due to its proximity to several road networks.

Eighty people work for the NX group, five of whom have been recruited in recent months due to the demand.

Powell said he receives constant requests from customers making sure they have enough space and new inquiries “on a daily basis”, especially from food companies.

“It’s really, really interesting times... We are very positive about what Brexit will bring,” he said.

One customer last month requested “double the amount of space... because they believe there’s going to be a hard Brexit and they need the space,” he said.

With less than three months to go before Britain leaves the European Union on 29 March 2019, all scenarios remain open, from a negotiated exit with the EU to a total rupture which would threaten turbulence in supply chains.

“Whatever the result of Brexit, whether it is hard, soft deal or no deal we do expect some form of interruption in the supply chain,” said Peter Ward, president of the UK Warehousing Association, which brings together more than 750 companies in the sector.

“In an overall sense, this is good news for the sector because more warehousing is going to be needed.” But the British vote in June 2016 to leave the EU has also had negative consequences for the warehouse business.

Rising fuel prices because of the fall in the value of the pound and the departure of East European workers on whom the industry relied “really heavily” have hit the sector hard, Ward said.

Published in Dawn, January 9th, 2019