Seven fire crews have been at the George H Kime and Co Ltd lorry depot since 1.37pm this afternoon.
Smoke billowing from the building can be seen for miles, according witnesses.
The mum, who was forced to shut her windows because of the smoke, told our newspaper she left her home via the back roads because the main A52 has been closed by the emergency services.
She said the back of the building now looks to have collapsed.
Charlotte Owens, of Fishtoft, was on her way back home from Skegness when she spotted the smoke in the distance.
"I just managed to get through before the A52 was closed," she said. "There were so many emergency service vehicles there.
"The whole shed at the back was completely on fire."
Lincolnshire Fire and Rescue are urging motorists to avoid the area and for residents to keep their windows closed.
Fire appliances from Leverton, Boston, Spilsby, Kirton, Donington and Alford remain at the scene.