Pakej to improve Pos Malaysia’s savings and income

The initiatives include sharing of PUDO parcel point networks and digital transformation promotions, among others

by AZALEA AZUAR / Pic by BLOOMBERG

THE National Courier Accelerator Plan (Pakej) is set to improve Pos Malaysia Bhd’s cost savings and generate additional income.

The Malaysian Communications and Multimedia Commission (MCMC) introduced the initiative to improve the quality of services provided by logistics players to ensure the industry remains competitive and consumers receive high quality service.

According to Hong Leong Investment Bank Bhd (HLIB) research analyst Nazira Abdullah, before these benefits could help in the long run, they would have to go through a gestation period first.

“Pos Malaysia’s near-term outlook remains challenging (due to) its mail and aviation businesses. We maintain our forecast and ‘Hold’ call with an unchanged target price (TP) of RM0.86,” she said in a report.

The Pakej initiative will also serve as a benchmark for courier players to improve their services which have seen declines, attributed to delivery times which have been known to skyrocket during lockdown, as well as complainants who had suffered poor service, late delivery and missing/damaged parcels.

Some of the Pakej initiatives are sharing pick-up and dropoff (PUDO) parcel point networks, asset collaboration in Posmen Komuniti, Parcel Commercial Vehicle Enhancement Proposal, digital transformation promotions, establishing self-regulated quality of service standards, revisiting licensing framework and a holistic digital infrastructure.

Nazira explained that the shared network for both parcel and postmen is the key to fixing costs that have been hampering the profitability of courier players.

“We reckon the effort to centralise the asset will be challenging as each courier player has different cost structure and capacity. Nonetheless, we believe it may lead to industry consolidation in future which paves way to operational efficiency and profitability.”

MCMC stated that the revenues for courier companies have stagnated despite higher courier volume in past years due to increasing competitive pricing whereby only 126 courier players were profitable.

The commission would not interfere with the pricing strategy of these courier companies.

“We believe this move is in favour of protecting consumers, especially low-income groups. While there could be some industry players that will try to capture market share by lowering its price, we reckon that this strategy will not be sustainable as they may find it difficult to keep up with service level agreement (SLA) targets.”

MCMC also stated that customers will be entitled for compensation if there is failure to meet the SLA.