Hoarding for Brexit sparks race for warehouse space in Britain

LEIGHTON BUZZARD, England, Dec 5 (Reuters) - 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 300,000 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."

RELATED: Crisscrossing Irish border, locals crave status quo after Brexit

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Crisscrossing Irish border, locals crave status quo after Brexit
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Crisscrossing Irish border, locals crave status quo after Brexit
Farmer James Martin who lives in Northern Ireland but sells his milk in the Republic of Ireland, cleans the milking shed after tending to his cattle on his dairy farm near the border village of Forkhill, Northern Ireland, December 7, 2017. "We're less than a mile from the border, surrounded by the Republic on three sides," said Martin. "This is where you'd feel the brunt of it (a hard border)." REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
The change in road surface which denotes the exact border with County Armagh in Northern Ireland on the left and County Monaghan in the Republic of Ireland on the right on the border village of Middletown, Northern Ireland, December 9, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Grass reflected in Lattone Lough which is split by the border seen from near Ballinacor, Northern Ireland, February 20, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES. TPX IMAGES OF THE DAY.
A old Irish phone box stands alongside a bus stop in the border town of Glaslough, Ireland, March 16, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Billboards are viewed from inside a disused customs hut on the border in Carrickcarnon, Northern Ireland, December 7, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Farmer Gordon Crockett, whose farm straddles both Northern Ireland and Ireland holds a lamb, in Coshquin, Northern Ireland, February 21, 2018. "At the minute there is no real problem, you can cross the border as free as you want. We could cross it six or eight times a day," said Crockett. "If there was any sort of obstruction it would slow down our work every day." REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Potter Brenda McGinn stands outside her studio, the former Jas Boylan shoe factory which was the main employer in the area until it shut down due to The Troubles, in Mullan, Ireland, March 16, 2018. "When I came back, this would have been somewhere you would have driven through and have been quite sad. It was a decrepit looking village," said McGinn, whose Busy Bee Ceramics is one of a handful of enterprises restoring life to the community. "Now this is a revitalised, old hidden village." REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Seamus McQuaid takes packages that locals on the Irish side of the border have delivered to his business, McQuaid Auto-Parts, to save money on postal fees, near the County Fermanagh village of Newtownbutler, Northern Ireland, December 20, 2017. "I live in the south but the business is in the North," said McQaid. "I wholesale into the Republic of Ireland so if there's duty, I'll have to set up a company 200 yards up the road to sell to my customers. I'll have to bring the same product in through Dublin instead of Belfast." REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A bus-stop and red post box stand in the border town of Jonesborough, Northern Ireland, November 29, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
The sun is reflected in Lough Foyle which is part of the Northern Ireland border near Londonderry, Northern Ireland, February 21, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A defaced 'Welcome to Northern Ireland' sign stands on the border in Middletown, Northern Ireland, December 9, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
An abandoned shop is seen in Mullan, Ireland, March 16, 2018. The building was home to four families who left during The Troubles. The town was largely abandoned after the hard border was put in place during the conflict. Mullan has seen some regeneration in recent years, but faces an uncertain future with Brexit on the horizon. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A traffic cone stands in a field on the border between County Donegal and County Londonderry near Lenamore, Northern Ireland, February 1, 2018. SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
The border seen through tree branches in Kiltyclogher, Ireland, February 21, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Mervyn Johnson who owns a garage poses for a photograph in the border town of Pettigo, Northern Ireland, February 20, 2018. "I've been here since 1956, it was a bit of a problem for a few years. My premises has been blown up about six or seven times, we just kept building and starting again" Johnson said laughing. "We just got used to it (the hard border) really but now that it's gone, we wouldn't like it back again". REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Alice Mullen from Monaghan in the Republic of Ireland does her shopping at a former customs post on the border in Middletown, Northern Ireland, December 9, 2017. "I'd be very worried if it was a hard border, I remember when people were divided. I would be very afraid of the threat to the peace process, it was a dreadful time to live through. Even to go to mass on a Sunday, you'd have to go through checkpoints. It is terribly stressful," said Mullen. "All those barricades and boundaries were pulled down. I see it as a huge big exercise of trust and I do believe everyone breathed a sigh of relief." REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
David McClintock from Donegal sits in the 'Border Cafe' in the border village of Muff, Ireland, February 1, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Stephen Burns drinks in a pub on the Northern Ireland side of Belleek, February 20, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A man fills jerry cans with Kerosene on the border village of Middletown, Northern Ireland, December 9, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A disused Great Northern Railway line and station that was for customs and excise on the border town of Glenfarne, Ireland, February 21, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Union Flag colours painted on kerbstones and bus-stops along the border village of Newbuildings, Northern Ireland, February 1, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A bull stands in a field with a disused Customs Facilitation Office in the background on the border in Carrickcarnon, Ireland, December 7, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A road which crosses the border from County Donegal in Ireland to County Londonderry in Northern Ireland, is seen from near the border village of Lenamore, Ireland, February 1, 2018. There are no markings apart from the change in roadsigns. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
An old British postbox, painted green, stands at a disused railway station and Great Northern railway line that was for Customs and Excise on the border town of Glenfarne, Ireland, February 21, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Zig-zag steps lead up to the prehistoric stone fort of Grianan of Aileach where you can view the border between Ireland and Northern Ireland, seen from near the border village of Speenogue, Ireland, February 1, 2018. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
John Murphy flies the European flag outside his home near the border village of Forkhill, Northern Ireland, December 7, 2017. REUTERS/Clodagh Kilcoyne SEARCH "KILCOYNE BORDER" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
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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 Dec. 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.

RELATED: London road signs associated with the Brexit process

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London road signs associated with the Brexit process
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London road signs associated with the Brexit process
LONDON, ENGLAND - MARCH 16: The sign for New Change in Central London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Petty France in Central London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 21: A street sign for Pound Lane in North London is pictured on March 21, 2017 in London, England. (Photo by Carl Court/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for Freedom Close in East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 21: A street sign for Europe Road in South East London is pictured on March 21, 2017 in London, England. (Photo by Carl Court/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Little Britain in Central London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 21: A street sign for Sovereign Close is pictured on March 21, 2017 in London, England. (Photo by Carl Court/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for Nigel Road in South East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for Union Close in East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for Independents Road in South East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for May Road in East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Treaty Street in North London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Brussels Road in South West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Freedom Street in South West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Parliament Hill in North West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for England's Lane in North West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Spaniards End in North London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 17: The sign for Trust Road in North East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 17: the road sign for Lords Close in South East London is seen on March 17, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Brussels Road in South West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Downside Crescent in North West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Little Sanctuary in Central London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
LONDON, ENGLAND - MARCH 16: The sign for Parliament Hill in North West London is seen on March 16, 2017 in London, England. British Prime Minister Theresa May has called for a 'more united' Britain as she prepares to trigger Article 50 to take Britain out of the EU, while also facing fresh calls for a second Scottish Independence referendum. (Photo by Leon Neal/Getty Images)
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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.

And the type of space is also changing. Where firms normally want racks so they can access components as needed, many now want them removed so they can bulk-stack finished product from the floor up.

Adrian Colman, the head of Britain's largest logistics firm Wincanton, said customers started asking for extra space around three months ago to store finished product, spare parts for their factories and raw materials including packaging.

With around 20 million square feet of warehouse space under control in the UK, Colman has never seen such a collective move by manufacturers to secure storage. "Companies are trying to do what they can without breaking the bank," he said.

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 pounds 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 May's deal in parliament, has coincided with the Christmas rush.

One Miniclipper warehouse was 99.9 percent full last month. Reaching 15 meters up to the eaves, it holds pallets of air conditioning equipment, sportswear, toiletries and health foods.

As much of that moves out for Christmas, customers are booked to move Brexit stockpiles in. Masters said that while businesses traditionally used one logistics provider, they were now ringing around multiple sites to find space. "We haven't ever had this many inquires for new business," she said.

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.

Real estate partner Catherine Fearnhead at Addleshaw Goddard said e-commerce take-up had been so rapid that firms once relying on a major distribution site in central England now need bases around the country to guarantee faster deliveries.

Developers have in recent years converted multistorey carparks into distribution centers, secured planning permission to build one major site underground and are increasingly building warehouses alongside residential estates, to secure both planning permission and workers for the facility.

The focus on e-commerce means the industry has failed to build enough speculative warehousing to be leased by multiple tenants, the type of space that is required now. Real estate group Savills says there is around 28 million square feet of vacant space in 2018, compared with 94 million in 2009.

Commercial real estate group Jones Lang LaSalle (JLL) owns one of the few major empty warehouses near Heathrow Airport, Britain's largest port by value. Cargo 777 is a recently refurbished, gleaming white, grey and black 81,000 square foot site that is likely to be let to a logistics provider.

"We are seeing people take extra space on the basis that it is going to take longer to get goods through the airport," said Melinda Cross, JLL's director of Industrial and Logistics.

"That is due to Brexit and people are making plans for that now. They're getting ready. Everyone is having to crack on." ($1 = 0.7863 pounds) (Additional reporting by Arathy S Nair in Bengaluru; Editing by Catherine Evans)

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