MCMC recently organised an analysts’ briefing unveiling the five-year (2021-2025) Pelan Accelerator Kurier Negara (PAKEJ). In a simple word, PAKEJ is the combination of all couriers’ leaders under one package/application utilising same asset-sharing infrastructure and same last-mile drop point. The Covid-19 pandemic that started in early 2020 has propelled courier volume beyond normal industry capacity, overloading the system and causing delivery delays. This has heightened the need to re-assess the industry’s performance as a whole in embracing digital transformation to thrive alongside the e-commerce boom while sustaining industry growth in the Digital Economy. PAKEJ will enhance the current courier licensing framework to provide better opportunity and streamline regulation to support the national aspiration of reliability, reach, relevance, and resilience. We are longterm positive on this PAKEJ collaboration providing “win-win” benefits to industry leaders and consumers. This initiative paves the way towards the efficient use of POSM (MP;TP: RM0.800) large network of post offices under the asset-sharing initiatives, coupled with opportunities for its unionised workforce to tap on the Posmen Komuniti initiative, ultimately improving its profitability in the long-term. Maintain NEUTRAL on the sector.

Pelan Accelerator Kurier Negara (PAKEJ). Malaysian Communications and Multimedia Commission (MCMC) recently organised an analysts’ briefing unveiling the Pelan Accelerator Kurier Negara (PAKEJ). PAKEJ is a brand name of the National Postal and Courier Industry (NPCIL)’s action plan that aims to provide wider coverage, access and greater flexibility to customers by enhancing the Quality of Service (QoS) to provide seamless customer experience and support the projected industry growth. A five-year plan (2021-2025), PAKEJ will be implemented based on two key pillars namely: (1) Achieving Industry Sustainability, and (2) First-Class Quality of Service (QoS) and Coverage-backed Growth. The initial rollout of PAKEJ will focus on establishing a comprehensive Parcel Point Network with more Pick-Up and Drop-Off points (PUDO) through a working group involving the courier licensees, local councils and local authorities. PAKEJ aims to provide Malaysia with first class courier services through the 4Rs approach: (i) Reliability – Quality of Service, (ii) Reach – Seamless Coverage, (iii) Relevance - Through Industry Growth, and (iv) Resilience – Sustainability. PAKEJ aims to deliver Quality of Service to all Malaysians seamlessly to support the projected e-commerce industry growth from 14 parcels per capita to 30 parcels per capita by 2025. This initiative paves the way towards the efficient use of POSM’s (MP;TP: RM0.800) large network of post offices under the asset-sharing initiatives, coupled with its unionised workforce tapping on the Posmen Komuniti initiative, ultimately improving its profitability in the long-term.

The National Postal and Courier Industry Lab is an 8-week lab that aims to strengthen the postal and courier industry to ensure its long-term viability and provide first-class quality services to the Malaysian public through an action plan formulated jointly with industry players and stakeholders (108 members). The Covid-19 pandemic that started in early 2020 has heightened the need to re-assess the industry performance as a whole in embracing digital transformation to thrive alongside the e-commerce boom while sustaining industry growth in the Digital Economy. In Malaysia, the Digital Economy is expected to grow threefold, generating a total gross merchandise value (GMV) of RM125bn by 2025. There is a huge increase in the number of Malaysian consumers turning to digital services, with more than one in three Malaysians using digital services for the first time ever in 2020, according to the e-Conomy SEA 2020 Report published by Google, Temasek, and Bain & Company. It is evident that digital adoption will continue to be fast-tracked in the near future and translated into a tremendous growth potential for the e-commerce sector.

As a customer, how will I benefit from it? PAKEJ paves the way for seamless customer experience and wider coverage of last mile delivery. The Parcel Point Network is one of the key initiatives that provide greater flexibility and accessibility to consumers with collaboration between e-commerce players or the market places, couriers and parcel locker providers to provide an inter-operable platform available for use by all courier players to improve the adoption of Pick-up Drop-off (PUDO) points. Customers will also be able to track their packages using a dedicated online application or through the courier service provider’s website.

What are the initiatives of PAKEJ that will benefit the SMEs in rural areas? PAKEJ initiatives are targeted to enhance the access to courier services, as well as overall coverage by optimising available assets and infrastructure. SMEs can broaden their customer base with wider reach through the asset sharing and collaboration with Posmen Komuniti initiative which covers a wide range of rural areas, particularly in East Malaysia. For example, SMEs in rural areas can opt for their parcels to be collected and delivered by members of the Posmen Komuniti. The Pusat Internet Komuniti (PIK) will also function as PUDO points for their respective local communities. PUDO@PIK enables SMEs to utilise their local PIKs as a collection point for their merchandise.

Maintain NEUTRAL on the sector, for while the PAKEJ initiatives are promising, results will not be immediate. Meanwhile, its recent privatisation proposal notwithstanding, MMCCORP’s earnings are expected to be driven by its ports (especially PTP) and associate Malakoff, underpinned by economic recovery momentum riding on the resumption of the global and domestic trade activities. As for WPRTS, we expect it to recover gradually starting 2021 on the back of Covid-19 vaccinations, normalization of domestic and global economic activities, and pent-up demand effect. On the other hand, POSM has narrowed its losses in the recent quarterly results largely due to the postage tariff revision in Feb 2020 and supported by the high parcel volume from stronger e-commerce and online market place demand. However, its aviation division continued to suffer losses due to loss of revenue from ground handling and in-flight catering pursuant to flight cancellations in the wake of Covid-19 pandemic as international borders

Source: Kenanga Research - 18 Jun 2021