Moorebank Freight Hub: The True Last Mile of the Digital Economy

One of the major issues for the digital economy in Australia has less to do with the availability of a connection to the internet, and more to do with getting goods purchased via the net to one's front door. The Moorebank Intermodal Terminal might just provide the model solution for the true last mile of the digital economy: home delivery.

Much has been said about the importance of connectivity and the benefits of internet communications. Many have hinted at the environmental-saving benefits of reduced travel and so on. But in practice, Australia's distribution infrastructure has evolved from a number of legacy transport technologies that would benefit from greater intermodal connectivity.

This week, the federal government signed an agreement with the Moorebank Intermodal Company (MIC) and the Sydney Intermodal Terminal Alliance (SIMTA) to develop the Moorebank Intermodal Terminal. SIMTA is a consortium established by ports and logistics operator Qube Holdings (67%) and rail freight operator Aurizon (33%). MIC is a government business enterprise that will be privatised once the terminal is operational and commercially sustainable. Details of the proposed development can be found here.

The basic purpose of the terminal is to move more freight out of Port Botany via rail. At present, some 5,000 shipping containers are moved to and from the port by road each day. The Moorebank hub will reduce the number of container trucks in Sydney but also encourage more interstate containers to be moved via rail. This is good news for the rail industry and will no doubt provide greater incentives for an increase in rail freight.

The benefits of rail freight include lower road maintenance costs and increased road safety due to a decrease in large trucks on the highways and in greater Sydney. The Westconnex project will facilitate greater movement of goods in the local area. As the digital economy continues to grow, it is not unreasonable to expect the number of light trucks to increase in local areas. Indeed, it is not uncommon to see delivery vans from various providers ranging from Australia Post, to Coles and niche providers such Lollypotz in most local areas. Of course, an increase in home delivery means a decrease in the number of cars on the road.

The design of the hub will include the use of warehouses as noise buffers for rail operations while taking advantage of Commonwealth land that is otherwise underutilised.With Sydney Metro Airport Bankstown and the proposed developments at Badgerys Creek nearby, the Moorebank hub should be the catalyst for major change in how freight distribution is managed in Australia.

But not everyone is happy about the proposed logistics hub. A concerted effort by Liverpool City Council and local members suggests that the Badgerys Creek site would be better suited to serve the needs of Sydney's future freight movement. Most of the opposition centres around the impact on  local neighbourhoods and health with predictions of "84% more trucks on the Hume Highway, 350% more trucks on Moorebank Avenue, and 22% more trucks on the M5 west of Moorebank Avenue".

But what is the alternative?

Property markets change, neighbourhoods change, Sydney's growth will continue. The problem will
not go away and less action will result in greater problems in the future. Even with the Moorebank freight hub approval, it will not be in operation until 2017. And this is in a location where public and private sector interests coincide, along with a willingness for large-scale private sector investment. The advantages of the Moorebank site are available now and would fit in with other investments in Westconnex and the Badgerys Creek development. 

But simply waiting for the stars to line up at Badgerys Creek in the same way they have at Moorebank is nothing less than wishful thinking. The Moorebank logistics hub is an opportunity that should not be missed. The challenge, of course, is to manage the disadvantages experienced by residents and local neighbourhoods. 

Nonetheless, some of the most important challenges to our future standard of living are plagued by nimbyism. And managing the social, political, environmental and economic disadvantages in local neighbourhoods while ensuring Sydney doesn't choke itself to death is not a policy challenge for the faint-hearted. But the true last mile is indeed the last straw, and the digital economy marches on.