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Pos Malaysia to Remain a Significant Player In Mail, Parcel Segments

KUALA LUMPUR: National postal operator Pos Malaysia Bhd will remain a significant player in the mail and parcel business segment despite stiff challenges coming from competitors.

Pos Malaysia Bhd chief executive officer Charles Brewer said that a big part of the company’s transformation is transforming its culture, ensuring that all of its 15,000 employees are clear about how it needs to operate.

Chief executive officer Charles Brewer said that despite the challenges, including foreign exchange fluctuations and regional geo-political concerns, Pos Malaysia will continue to upscale its operations across all business segments.

He said that over the last decade, traditional mail, which has long been Pos Malaysia’s core business, has experienced a decline ranging from -2 per cent to -38 per cent.

“This downward trend was exacerbated globally during the Covid-19 pandemic, with mail volumes experiencing low double-digit declines due to various disruptions,” he told The Exchange Asia in a recent interview.

Pos Malaysia handles around one to one and a half million letters daily, and the decline in the business segment was due to COVID-19, which significantly contributed to the decrease in the already diminishing business sector.

While the company continues navigating the challenges, Pos Malaysia expects another year of continued decline in mail volumes, a downtrend the company has faced over the past ten years.

Charles said that the situation has somewhat stabilised post-Covid and is returning to pre-pandemic decline rates of 6 per cent to 8 per cent.

The company’s core business is divided into two significant segments – traditional mail and parcel – presenting distinct challenges.

The mail and parcel segment is Pos Malaysia’s primary business.

Charles emphasised that, as the nation’s postal operator, Pos Malaysia has a vital duty to keep Malaysians connected, ensuring the timely delivery of mail.

He said that in adapting to current and new challenges, Charles emphasised innovation and resilience as Pos Malaysia explored strategies for diversifying its services and reimagining its business model to remain relevant in an era where traditional mail is steadily declining.

“In addressing new challenges, Pos Malaysia looks towards a future marked by innovation and strategic transformation,” Charles noted.

Despite continued growth in parcel volume, which is contributed by the booming e-commerce industry, the segment has attracted many new players who are establishing their own logistics solutions, squeezing further Pos Malaysia’s tight margin.

“What was initially seven, eight, or nine years ago, a significant upside opportunity is still an opportunity, but it is harder and more competitive to make a decent return in that space,” Charles said.

Explaining further operations, Charles said the logistics services sector in Malaysia operates within a relatively open market, with limited regulatory constraints on new entrants.

He said there are approximately 120 courier operator licenses in Malaysia, serving a population of 30 million.

“To provide a perspective, the contrast with Indonesia is stark, where only about 30 licenses serve a population of 350 million. With a population of 70 million, Thailand has a similar number of licenses.

“The competitive nature of Malaysia’s logistics market is one of its distinctive features, offering opportunities and challenges. The abundance of licenses contributes to a vibrant but relatively deregulated environment, becoming the first challenge in the parcel sector,” he said.

Charles said the government and relevant agencies must look into creating a conducive playing field for the domestic courier industry, particularly limiting the number of foreign players to give local players a more significant market share.

“We have more than 15,000 employees, and Pos Malaysia is one of the oldest companies operating in Southeast Asia and certainly one of the oldest companies in Malaysia.

“We have a fantastic history, a fantastic brand, and much to be proud of.

“So a big part of our transformation is transforming our culture, making sure that all of our 15,000 employees are very clear about how we need to operate and behave to keep the customers we have—more customer centricity and employee centricity, which sits right at the heart of that cultural transformation,” Charles said.

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