"There are six or seven things that we have been asking the regulators to regulate. But the key ones include the number of licences, as there are just too many players in Malaysia. For comparison, there are over 120 players in Malaysia and about 40 in Indonesia and over 30 in Thailand.” — Pos Malaysia group CEO Charles Brewer.

KUALA LUMPUR (June 27): Pos Malaysia Bhd continues to be cautiously optimistic that it will deliver improved results for the financial year ending Dec 31, 2023 (FY2023) after halving its losses in FY2022 and reporting an improved performance in the first quarter of this year.

Group chief executive officer Charles Brewer said the group has made solid progress in its transformational initiatives and return to profitability despite significant headwinds, with almost all business segments registering profitability except the parcel and retail segments.

The segments also include courier, mail, international, logistics, and aviation.

He noted that postal, which is a combination of parcel and mail segments, contributed 63% to the revenue, followed by logistics (17%), aviation (13%) and others (about 7%).

“In the journey to profitability, if you look at things that you need to resolve in order to be profitable, there will be the parcel segment. If you look to opportunity, the retail segment has the opportunity to create significant value for us if we execute that very well,” he told reporters during a luncheon here on Tuesday (June 27).

Despite recording lower revenue, Pos Malaysia managed to halve its net loss to RM167.67 million in FY2022 from a net loss of RM335.73 million in FY2021.

Brewer also shared that the path to profitability for retail is fairly short to medium term; however, for parcel it is a bit tough.

Pos Malaysia, he said, is looking for opportunities to create more value for its retail sidetracking — what have been done by other postal operators by transforming it to do other things such as banking, life sciences, insurance, coffee, pharmacy and more.

“As for the courier segment, it is a function of the amount of volume you carry, and the selling price. Up until about the third quarter of last year, we were on track to bring that back to profitability, but then the volumes dropped considerably.

“After the Movement Control Order was lifted and retail opened, a lot of customers went back to retail, to brick and mortar. So the volume that was about 75 million parcels a month is now probably around 45 million. Everybody had less volume now and on top of a fixed cost base,” he shared.

He highlighted that courier service is currently dominated by the top two e-commerce players in the country, which are practising “masking” by not allowing customers to choose their courier service.

Brewer said they are controlling about 50% of the market share, while Pos Malaysia holds about 15% to 20%.

Therefore, he said, there is a need for regulators to step in to regulate the market, and Pos Malaysia has been in talks with the Malaysian Communications and Multimedia Commission, as well as the Malaysia Competition Commission on the matter.

“Basically, there are six or seven things that we have been asking the regulators to regulate. But the key ones include the number of licences, as there are just too many players in Malaysia. For comparison, there are over 120 players in Malaysia and about 40 in Indonesia and over 30 in Thailand.

“The second one is the need to regulate the selling price so that the big players will not simply lower the price unreasonably to kill other players and the third one is the practice of masking.

“These are all to make sure that consumers are looked after and the local courier industries are protected and, above all else, make sure that their employees have jobs and are properly rewarded,” he shared.

He highlighted that courier companies which have about 80,000 people under employment are currently reporting losses and, to date, quite a number of them have fallen into Practice Note 17 status nationwide.

This, he added, needs to be resolved or the prospects for the industry could be really bleak.

On the response from regulators, he commented that it is positive with the new government as they listen and understand the issue.

However, he said, looking at the regulations in the banking and the telecommunication sectors which proactively safeguard local players, there is also a need for regulators to step up and do the same thing for courier services.