On 31st January 2020, when the Brexit changeover phase ended, many UK businesses chose to stockpile their goods. This was because when the UK exited the European Union Single Market and Customs Union, they faced higher importation costs and trade restrictions between the UK and EU members. UK businesses have chosen warehouse storage solutions to store a wide variety of goods including food and clothing in a bid to make sure that stocks do not run low.
The UK imports a little over 40% of its food and beverage from overseas and storing goods in bulk can help businesses keep up with supply chain demands while mitigating the disruptions with trading with the EU. Stockpiling has been critical to reduce stock shortages caused by the difficulties at UK ports and borders, which have become congested post-Brexit. However, stockpiling is not appropriate for all types of products, in particular perishable or short shelf-life goods. The frozen food sector has been the most affected as space for cold storage is in short supply.
As many UK businesses found stockpiling the solution, the demand for storage space has caused much of the UK’s warehousing to run out. Adding additional pressure, the surge in e-commerce transactions has created the need for more than 30 million square feet of new warehouse space in 2021.
Brexit has clearly underlined the requirement for more readily available space for storage. Over 85% of warehouses in the UK claim to be at full capacity and this is increasing the cost for storage space for businesses and importers. As an example, a 25% increase in Brexit connected enquiries in 2021 was recorded by Western Industrial Business Interiors , suppliers in the UK of storage mezzanines for warehouses and storage spaces.
The vacancy rate for specialist warehousing in the UK has dropped to 5.6% and businesses are now focused on improving their ability to meet existing storage requirements. However, creating extra warehouse space in the UK is a very expensive, complex and time-consuming task. This calls for additional effort from warehouse storage providers to expand their warehouses to accommodate more goods and even add new refrigeration for cold storage because of the increasing demand.