Business, Freight News, Logistics

Brexit set to force up warehouse costs, says UKWA

[ February 12, 2020   //   ]

Increased customs checks at UK ports are likely to drive up demand for warehousing in an already tight market said UK Warehousing Association chief executive Peter Ward, following remarks by Chancellor of the Duchy of Lancaster Michael Gove at a recent Border Delivery Group.

He said that Gove also made it clear that the policy easements put in place to mitigate the risks of a ‘No Deal’ scenario are no longer on the table and will require traders and their intermediaries to submit over 200 million extra customs declarations.

Ward said that there will certainly be interruption of flow, likely to be mitigated by companies holding additional inventory and demanding additional warehousing space. This is happening at a time when the market is almost at capacity as the industry accommodates the massive shift from high street retailing to online and ecommerce fulfilment.

While Britain is, in effect, gearing up for a ‘Hard Brexit’, UKWA welcomes government plans to open new Freeports across the UK – inland as well as adjacent to ports.

UKWA is calling on association members and non-members alike, 3PLs, retailers as well as real estate developers and industrial agents to join with it to develop an imaginative, coherent response to the Government’s proposals.

Ward said that many companies with existing facilities, for example, those already involved with food distribution could, if given the necessary policy framework, adapt to provide inland inspection depots.

While land use and planning changes are most certainly required to allow for more warehousing nearer point of consumption, this is a longer-term strategy, he explained. “Right now, we need to respond urgently to the spike in demand for warehousing services that inevitably lies ahead.”

Bottlenecks at ports seem inevitable as UK businesses grapple with the process, systems and documentation they will need to move their goods to and from the Euro zone; whilst both public and private sectors face the challenge of recruiting additional staff – knowledgeable and trained customs administrators within the logistics sector, and for HMRC and Border Force the increased workforce that will be needed to police the new customs formalities.

With demand for storage space set to rise, it is more important than ever that policy makers, both nationally and locally, take on board the need for well-located, high quality warehousing and distribution facilities close to populations, reviewing land use, planning and infrastructure legislation to allow for the growth of the warehouse space that is required now and in the future.