Freight expectations

The contract to operate the Moorebank Intermodal Terminal is being keenly sought by major Australian companies and international transport operators.

It has been suggested that Woolworths and rail operator Aurizon are among the potential bidders for what has been described as a nationally significant infrastructure project.

The national director of corporate industrial solutions at Jones Lang LaSalle, Andrew Maher, said the Moorebank Intermodal Terminal is expected to generate as much as $10 billion in economic benefits through reduced freight costs and less traffic congestion, and better environmental outcomes.

Mr Maher said the use of rail throughout Sydney and NSW was increasing and the new Intermodal Logistics Centre at Enfield would create greater efficiencies in freight and logistics.

Sydney Ports is developing the $300 million centre, due to open later this year. It will cater for demand in central-western Sydney.

"A plan for a network of additional intermodal terminals in the central-west, south-west and west of metropolitan Sydney is also endorsed by the NSW government to meet predicted demand," Mr Maher said.

According to Jones Lang LaSalle's first quarter 2013 market commentary, there are only 309,600 square metres of projects under construction this year.

"Despite limited supply, numerous suitors are still looking for high-grade quality assets in the investment market, including domestic institutions, offshore groups and offshore mandates through third parties, syndicates and boutique fund managers," Mr Maher said.

"We expect the transport revolution, driven by the need for greater freight and logistics efficiencies, will support investors and tenants in the industrial logistics sector this year."

The influx of bigger and more efficient container ships coming onto the market will also enable larger volumes of goods to be shipped in a more streamlined, environmentally friendly and cost-efficient way.

Mr Maher said the demand for larger container ships is increasing due to competition between destinations, cost and environmental factors, and the need for assurance of continuity of supply.

Rich Thompson, the Chicago-based managing director for the global supply chain and logistics solutions team at Jones Lang LaSalle, said rising freight costs was one of the major challenges facing supply chain professionals globally, emphasising the focus for companies on reducing freight transport costs.

"Our research figures show transport can account for as much as 50 per cent of a company's total operating costs," Mr Thompson said. "Gaining maximum cost efficiencies and providing fast and reliable delivery of goods are two key challenges many businesses are focused on. This is propelling interest in alternative, lower-cost modes of transportation, including intermodal, rail and water."