Findings and Analysis

Terminology alert!!!

Fulfillment Center

Fulfillment centers are specialised warehouses that store finished products and prepare, pack, and ship customer orders - typically for e-commerce - either directly to consumers or to retail stores.

Key Characteristics of Fulfillment Centers

• Strategic location: Often near transport hubs and densely populated areas to ensure fast, efficient delivery to end customers.

• High scalability: Designed to handle large, fluctuating volumes of small-parcel, multi-item orders shipped to geographically dispersed destinations. Advanced technology and automation are often required to maintain speed and accuracy.

Two Main Types of Fulfillment Centers

• 3PL (Third-Party Logistics):
  Operated by logistics providers, offering warehousing and order fulfillment services to multiple companies — ideal for small e-commerce businesses without in-house logistics capabilities.

• In-House:
  Managed by the product-selling company itself, typically used by large retailers or brands with high order volumes and their own delivery team for better control over operations.

Findings

Note: Information on fulfillment centers in Greater Melbourne was collected through manual searches on Google Maps, company website visits, news articles, and LinkedIn posts. The data is not exhaustive and may not represent the complete landscape of fulfillment centers in the region.

Analysis

• As the pandemic exposed the risks of outsourcing, more in-house fulfillment centers are being built. Major supermarket chains such as Coles, Woolworths, and MetCash-IGA only began developing their own distribution centers after COVID-19. Coles, for instance, relied on Linfox as its 3PL provider in 2018 but is now constructing its first in-house, fully automated facility in Melbourne. Among established names, only Aldi had its own center as early as 2010—its market-leading position highlights the benefits of taking full control over the supply chain.

• Despite the e-commerce boom, the 3PL market remains heavily dominated by Amazon, which continues to expand with mega fulfillment centers.

• Fully automated fulfillment centers are becoming the norm, with new warehouses built by large, well-capitalized players like Amazon and Coles. These technologies are often out of reach for smaller operators, raising market barriers for new entrants.

• Altona, Laverton North, and Truganina remain key warehousing hubs, supported by prime location and ample land reserves for ongoing industrial development.