Woolworths to overhaul supply chain with two new distribution centres
Qube’s Moorebank Logistics Park in Sydney is set to house two new distribution centres for Woolworths, following the announcement of a joint $1.2 billion investment.
Set to open in 2023 and 2024, an 34,600-square-metre automated regional DC and a 40,700sqm semi-automated national DC, which are subject to New South Wales government planning approval, “will strengthen Woolworths’ supply chain and deliver the new capacity needed to underpin future growth”, the supermarket says.
Both sites will build on semi-automated and automated technology deployed at Woolworths’ Melbourne South Regional Distribution Centre, which was opened last year.
More on Woolworths’ Melbourne development, here
Woolworths Group will invest around $700-$780 million in the technology and fitout of the two distribution centres over the next four years and has signed an initial lease term of 20 years with Qube.
For its part, Qube will invest around $420-$460 million to build the warehouses.
Each warehouse is targeting a Five Star Green Star Design and As-Built rating and will incorporate various sustainability initiatives including solar PV systems, LED warehouse lighting and rainwater harvesting.
“The investment at Moorebank will transform the way we serve our NSW stores, strengthen our network and deliver on our ambition to create Australia’s best food and grocery supply chain,” Woolworths chief supply chain officer Paul Graham says.
“Cutting-edge automation will build tailored pallets for specific aisles in individual stores – helping us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling.
“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.
“We’ve learnt a lot from our ground-breaking development at the Melbourne South Regional Distribution Centre (MSRDC).
“After hitting new volume milestones and dramatically improving the speed and accuracy of deliveries, MSRDC is now consistently supporting our Victorian stores – giving us confidence that now is the right time to invest in this new technology for our NSW network.”
Woolworths notes infrastructure investments by the federal and state government at Moorebank were key to its site selection.
It cites the direct rail access to Port Botany, which will provide “strategic benefits” for Woolworths’ transport network and help remove at least 26,000 of its truck movements from NSW roads each year.
A planning application seeking approval for the new facilities will shortly be lodged with the NSW Department of Planning.
“Woolworths’ long-term commitment will reinforce the commercial appeal of this nationally important infrastructure and freight project,” Qube managing director Maurice James says.
“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.
“Our project team is looking forward to working with the Woolworths team in delivering an optimal solution for their operations.”
The Australian Logistics Council (ALC) welcomes the news from two of its corporate members.
“This 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 alike,” ALC CEO Kirk Coningham says.
“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.
“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.
“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.”
However, with the new investments come the phasing out of existing facilities, meaning the Moorebank centres will replace the current ambient operations at Woolworths’ Sydney Regional Distribution Centre (Minchinbury), Sydney National Distribution Centre (Yennora) and Melbourne National Distribution Centre (Mulgrave).
These sites are expected to close by 2025. Temperature controlled fresh food distribution will continue out of Sydney Regional Distribution Centre (Minchinbury).
“While this change is a few years away, we’re absolutely committed to supporting our team members at existing sites through what will undoubtedly be a challenging transition,” Graham says.
“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.”
While Woolworths says the two distribution centres are expected to provide around 650 jobs once fully operational, along with more than a 1,000 jobs during construction, complete staff transition is unviable, a situation the Transport Workers Union (TWU) is aware of and has responded to.
“It is not an easy thing for workers to hear that in five years’ time their place of work will no longer exist,” TWU NSW secretary Richard Olsen says.
“But the TWU stands ready to help workers move on and use their skills and experience in other roles.
“The move towards automation in transport is closing down some areas of work but opening up others as the overall demand is expanding.
“In NSW there will be redeployment for some workers to Moorebank and, through the supply chain charter we have with Woolworths, we will be working with them to ensure safety and fairness in the new facilities for all transport workers.”