Leading logistics company, Qube, has announced it will partner with Woolworths Group on two state-of-the-art facilities budgeted currently at $1.2 billion.
Both parties are investing in an automated Regional Distribution Centre and a semi-automated National Distribution Centre in the Moorebank Logistics Park in Sydney.
The first of the new high tech distribution centres (DCs) is slated to begin operations in 2023.
Woolworths Group confirmed it will invest up to $780 million in the technology and fitout of the two distribution centres over the next four years.
The supermarket company signed an initial lease term of 20 years with Qube Holdings Limited, the parent of Qube which has committed between $420- to $460 million to building the warehouses.
Subject to State Government planning approval, the DCs will cost, as part of the joint investment, in the vicinity of $1.2 billion.
Moorebank Logistics Park is Australia’s largest freight infrastructure project and will link Port Botany direct to rail terminals and warehousing on a 243 hectare site.
The new Moorebank facilities will replace the current ambient operations at Woolworths’ Sydney Regional Distribution Centre in Minchinbury, the Sydney National Distribution Centre based in Yennora and the Mulgrave-based Melbourne National Distribution Centre.
Woolworths plans on closing these sites by 2025, around the same time both new facilities are expected to be operating at full capacity.
The project is also expected to generate around 1000 construction jobs.
ALC CEO Kirk Coningham said the announcement represents a major step in harnessing the power of world-leading technology to deliver a wide range of supply chain benefits, for businesses and consumers.
“ALC has been a long-time advocate for the development of the Moorebank Logistics Park and its direct rail connection to Port Botany. This allows more freight to be moved via rail, helping to alleviate road congestion, which in turn delivers environmental benefits through reduced emissions,” he said.
“As we have witnessed throughout the COVID-19 pandemic, providing logistics companies and their customers with the ability to make more efficient deliveries is critical,” said Coningham.
“These new facilities will help to achieve that objective by deploying proven, cutting-edge technology that allows for faster resupply of stores while also requiring less manual handling of freight, thereby reducing safety risks.”
Direct rail access to Port Botany will provide strategic benefits for Woolworths’ transport network and help remove at least 26,000 of its truck movements from NSW roads each year.
The long-term commitment, according to Qube Managing Director Maurice James, would reinforce the commercial appeal of this nationally important infrastructure and freight project.
“The benefits of railing containers direct from Port Botany to a terminal co-located with warehousing across a site the size of the Sydney CBD will deliver Woolworths time and cost efficiencies,” he said.
“Our project team is looking forward to working with the Woolworths team in delivering an optimal solution for their operations.”
Both sites will build on semi-automated and automated technology currently pioneered by Woolworths at its Melbourne South Regional Distribution Centre.
Woolworths Chief Supply Chain Officer Paul Graham said the investment at Moorebank, which he anticipates enabling a safer work environment, will transform the way it services its grocery supply chain in NSW.
“The new facilities will also help progress our localised ranging efforts, with the ability to hold many thousands more products centrally than we can in our existing facilities,” he said.
Graham acknowledged the complexity and challenges inherent in such a bold transition.
“We explored options to upgrade our existing sites, but the aging infrastructure just won’t be able to support the growth in volumes we’ll need to service in the years ahead,” he said.
“We’ll look to offer redeployment opportunities wherever possible with 650 roles available at the new Moorebank sites, as well as providing a wide range of support and career transition services to our team well before site closures.”
Coningham said the community will ultimately benefit through having ready access to a wider range of products and lower prices that can be realised through greater supply chain efficiency.
“Today’s announcement is a welcome and timely contribution by two of Australia’s most significant companies to our post-COVID economic recovery. These major infrastructure investments will enhance the reliability and resilience of our supply chains and stimulate job growth at this critical time," he said.