New food storage facilities set to ease shortages

A new investment in FMCG storage and logistics facilities valued at over a quarter of a billion dollars is set to help New Zealand prepare for future pandemic related food shortages. 

When completed, the two purpose-built facilities at Drury South Crossing, the country’s largest industrial and residential development, will cover over 9.8ha hectares and be capable of storing 95,000 pallets and processing over 5,000 outwards pallets per week.

The first stage of the new warehousing is set to be operational within 12 months. Over 200 jobs will be created across the two facilities.

Kris Webster, Sorted Logistics director, says a global shift in the FMCG industry away from a ‘just-in-time’ towards a ‘just-in-case’ inventory management model is driving demand for managed storage and distribution.

He says their revenues are growing by around 25 percent annually as the food and retail industries move to maintain consistent stock levels in supermarkets and other retail stores.

“Supply chain disruptions have been a hallmark of the pandemic and New Zealand businesses have adapted to this uncertainty by significantly increasing their inventories of imported and locally made goods.

“In practice, this means a company that used to hold 5,000 pallets of inventory is now holding in excess of 7,500 pallets.

“This additional demand for logistics services is then aggregated across thousands of businesses, which has seen our industry grow significantly – and our forecasts see this trajectory continuing over the coming years,” he says.

Tony Gorton, managing director of Cardinal Logistics says the industry is expanding rapidly in response to the evolving macro environment. 

He says their new FMCG logistics facility will be the largest of its kind in the country when it opens next year.

“Logistics companies are recognising the growing pressure on capacity as more inventory is needed to help fortify international supply chains.

“We specialise in FMCG logistics and the new warehouse has been purpose designed to help us move these products more accurately and in greater volumes.

“When complete, the new 40,000sqm facility will be our largest and capable of storing 65,000 pallets of fast moving consumer goods.

“What we are building here will help provide us with the infrastructure to prepare for, and navigate, whatever form the ‘next Omicron’ manifests in,” he says.

Stephen Hughes, Drury South Crossing CEO, says the two new logistics facilities are the first of a series of large-scale industrial warehouses to be consented at the 361ha mixed use development.

“Drury is one of the few remaining greenfield sites in the region where major industrial operators still have the flexibility to design warehouses to their requirements.

“The feedback from these organisations is that they are attracted to a site with an integrated residential development. This provides them with a nearby workforce that has a minimum distance to travel to work.

“The site’s location is sufficiently south of peak traffic flows and for the logistics industry, there are additional efficiencies achieved with trucks not returning from out of town and going past empty,” he says.