Warehouse space sought for Y2K preparedness

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From the Chicago Tribune:

Warehouse space sought for Y2K preparedness

By J. Linn Allen Tribune Staff Writer November 2, 1999

If the world falls apart on Jan. 1, at least we'll have corn flakes for breakfast.

Drew Axelson, Midwest regional vice president for National Distribution Centers, a Vineland, N.J.-based warehousing and distribution firm, said his company has increased its storage space through February to prepare for increased storage needs related to Y2K problems.

The third-party-logistics firm has a number of major food industry clients for which it stores and moves goods, and he said they've been requesting extra space to handle any emergencies that might arise.

The goods include "a lot of cereals and cookies and things like that," Axelson said.

Axelson was asked to find 250,000 square feet of short-term warehouse space in the Chicago area for a food company, but before a deal was done the company was able to pick up additional space in Columbus, Ohio, instead. He said he couldn't disclose the company name.

Distribution Centers also added 100,000 square feet on a short-term lease on the East Coast. "Overall, our inventory levels are peaking right about now. Everybody is hedging their bets," he said.

Axelson said he didn't know whether the companies are anticipating increased demand from consumers stocking up on non-perishable items or whether they fear their own supply chains might be compromised by computer problems.

David Pals, senior vice president of Grubb & Ellis Co.'s industrial services group, said he's received several inquiries from third-party-logistics firms but so far has done no deals.

"My take on it is that they must expect Y2K not to be a non-event," he said. "They want to store materials for distribution for the next (two months) . . . like air compressors, generators and dehydrated foods."

Pals said his view is that in January and February, the companies will need the space so they can handle all the returns from people who've found they don't need all the emergency stuff they stockpiled.

He added that these short-term deals are hard to do, because the warehouse owners with available space don't want to tie it up in short-term leases in case someone comes in wanting a 5- or 10-year deal.

"In real estate terms it's a curiosity," he said. "I hope it's a non-event."

And if it is we can celebrate with cereal and cookies for all.

-- plonk! (realaddress@hotmail.com), November 02, 1999


"If there's a 20-30 percent surge in national food sales in this country in the last month of the year, nobody can be ready for that."

"There's just not that kind of capacity out there. It's going to be an interesting fourth quarter."

Jeff Moyer - Ernst & Young Consultant - Speaking to: Grocery Manufacturers of America & Food Marketing Institute



-- Cheryl (Transplant@Oregon.com), November 02, 1999.

One Safeway store in our area today was clearing the very top shelves across entire length of store and replacing w/"warehouse boxed" items. Kind of reminded me of Price Club, only they've never looked like this in the past. Anyone else notice any changes at supermarkets? My son looked up and said loud enough for the whole store to hear "Hey, mom it's Y2K."

-- claurann (claurann@aol.com), November 03, 1999.

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