Why Sydney’s freight shift is putting Port Kembla in the logistics spotlight
Infrastructure aligns for Port Kembla growth
A new wave of freight and logistics activity could be building around Port Kembla, with industry leaders pointing to a rare alignment of infrastructure investment, industrial land and supply chain capability that could reshape the Illawarra’s economic role.
The NSW Government yesterday (Tuesday, March 3) announced a $270 million package for roads and transport links around the port, aimed at positioning the region for long-term growth.
The investment follows a broader shift in the state’s freight strategy, which will see bulk port operations such as cement, gypsum and sugar handling move away from Glebe Island at Bays West by no later than 2030.
The decision reflects the transformation of Sydney’s inner harbour for new uses and the need to consolidate heavy freight activity in ports with greater industrial capacity.
For Port Kembla, that shift positions the Illawarra more firmly within the state’s future trade and freight network.
NSW Ports CEO Marika Calfas said the investment strengthens the connections that underpin Port Kembla’s role in the state’s freight network.
“We welcome the announcement of $270 million in local transport links that will strengthen Port Kembla’s existing connections.”
“Port Kembla is a key gateway for maritime trade in NSW, handling millions of tonnes of diversified trade each year, including over a million tonnes of cement per annum.”
“Port Kembla is well positioned to service growth in bulk trades, as outlined in our 40-year Master Plan.”
A major part of that outlook is to strengthen freight connections between the port, Western Sydney Airport, and the wider state network.
Calfas said the proposed Maldon–Dombarton rail link is increasingly recognised as playing a much broader role than simply moving cargo.
“There’s a recognition that Maldon-Dombarton has a role in several areas. It’s not just about freight.”
“It’s about freight and passengers. It’s about connecting the Illawarra directly with Western Sydney and the Western Sydney airport.”
“It’s about resilience of the freight infrastructure and rail infrastructure.”
Calfas said the wider point is that major infrastructure must support multiple economic uses, not just a single industry.
“The key infrastructure investments that we need for Port Kembla are no different to what you need for other trades and passengers.”
Beyond the port gates, supply chain specialists say the Illawarra itself has the potential to play a much bigger role in freight and distribution networks.
Peter Jones, founder of Wollongong-based supply chain consultancy Prological, believes the region is approaching a turning point as businesses look beyond Sydney for logistics capacity.
“The Illawarra’s struggle has been that we’re so close to Sydney, yet from a logistics perspective just slightly too far away to be part of the Sydney logistics network.”
That dynamic, he said, is beginning to shift as land and operating costs in Sydney continue to rise.
“Because Sydney prices are getting so expensive and Sydney is a little bit landlocked, the day is coming when the Illawarra will come more into the fray.”
Jones argues the region already has many of the characteristics needed to support a major logistics precinct.
“From a distance and capability perspective, Wollongong is a great place to have a logistics hub.”
He said the Illawarra’s industrial heritage has created a workforce well-suited to supply chain and logistics operations.
“Our cultural history coming out of coal mining and steel making under a broad umbrella engineering type thinking means we’ve got a skills base here that’s really attuned to supply chain.”
Another advantage, he said, is the number of experienced supply chain professionals who already live in the Illawarra but commute to Sydney.
Jones also pointed to a practical operational opportunity already visible on local freight routes.
“The big transport companies come into Wollongong with full trucks and leave with empty trucks. So, that’s an imbalance.”
“That provides opportunity in Wollongong for us to be using those empty trucks to be then getting things back up into Sydney and into the national networks.”
However, he said developing a stronger logistics sector in the region will require scale.
“There’s a chicken and an egg element with that. We need the volume here in order to drive the efficiencies that are possible.”
“But it’s hard to get the volume because while the volume is low, those efficiencies aren’t there.”
Minister for Planning and Public Spaces, and Member for Wollongong, Paul Scully, said the investment reflects the growing role Port Kembla is expected to play in the state’s freight network.
“Port Kembla will play an even bigger role in NSW’s economic future, and this investment makes sure the Illawarra is ready to seize that opportunity.”
“By strengthening road and rail connections, we’re backing local jobs, supporting industry, and making sure growth happens where it makes sense.”
Minister for the Illawarra and the South Coast, Ryan Park, said: “This Government is serious about investing in the future of the Illawarra, and securing the region’s place as a key economic gateway for the State.
“This package will deliver the key roads and transport infrastructure we need to unlock limitless opportunity for growth in the region.”
For larger investors considering the region, Jones said long-term planning certainty is critical.
“There needs to be clarity around what the next 20 to 50 years look like in that big picture planning with some level of certainty.”
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