Amazon Begins Work on Fifth Victorian Facility

Work has begun on Amazon Australia's new sort centre at Goodman Group’s Amaroo Business Park in Craigieburn, north of Melbourne. 

The sort centre is expected to create around 200 jobs and will be the retail company’s first dedicated sort centre in Australia, which it said would speed up delivery across the country. 

Construction has begun on the 15,600 sq m site, with more than 700 construction jobs created, according to Amazon.

The Craigieburn Sort Centre will be Amazon’s fifth Melbourne-based site since its Australia launch in December, 2017.

It has fullfillment sites in Dandenong South and Ravenhall, and logistics sites at Tullamarine and Mulgrave.

▲ An artist's impression of Amazon's under-construction Craigieburn Sort Centre. Source: Amazon.

Amazon Australia’s operations director Craig Fuller said that the company wanted to speed up delivery times for customers. 

The specialist centre will sort picked-and-packed customer orders by final destination, then ship them to logistics sites for “last mile” delivery to customers.

“We know the past few years have been tough for Melbournians and we’re grateful to have had the opportunity to support our Victorian customers ...  and supporting thousands of small- and medium-sized Australian businesses in reaching their customers more efficiently,” Fuller said.

The market for online shopping and the ensuing delivery of goods grew during the pandemic lockdowns with some figures showing online shopping had grown from 8.5 per cent of all retail spending pre-pandemic to 15 per cent.

The S&P Global Ratings forecast earlier this year that industrial developers would turn towards logistics and fulfillment sector developments.

“However, industries supporting the transition to online shopping are thriving. Industrial landlords are riding the wave of demand for logistics services to support growing online consumption,” the S&P Global Ratings report said.

While large sort centres like Craigieburn are becoming more common, former Amazon executive, now a leading consultant, Brittain Ladd said in a recent JLL podcast that technology and micro-fulfillment stores were the future of distribution.

“We are about to witness the largest disruption of retail and the supply chain that we’ve ever encountered in the US and globally—and it’s going to be driven by technology,” Ladd said.

JLL’s national head of industrial and logistics Peter Blade said that Australia was going to catch up to the US in consumer demand. 

“Where we are currently, the US—with 25 per cent of its entire retail spend now online—was there four years ago ... but we’re headed there, no question,” Blade said.

Amazon Australia has also faced complaints around workers’ rights on several occasions since its 2017 launch, according to the Business and Human Rights Resource Centre.

Amazon Australia refuted claims of unfair pressure, lack of water and toilet breaks, unreasonable demands and insecure work for its casual warehouse staff in 2018 and 2019. 

In 2019, it faced claims of unfair termination, vague guidelines, unreasonable demands and safety concerns for its delivery workers on its Amazon Flex program.