This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 11, 2026 - May 17, 2026

A few years ago, delivering a parcel within the Klang Valley cost about RM8. Today, with the e-commerce boom, delivery cost has dropped to below RM4. Amid intense competition, local players have been upgrading their technology and raising service standards through application programming interfaces (APIs), real-time tracking and same-day delivery options.

But with margins already razor-thin, the race to digitalise and modernise operations has become a matter of survival for local players competing against foreign operators that now control 73.5% of total parcel volume.

“Liberalisation is good in the sense that you can learn a lot from these foreign players bringing in their technologies. Everything is done via handphone; you can place orders directly without going through a platform, and you already have APIs to track all your items and movements,” says Mohammad Shammairji Mat Abu, general manager of ABX Express (M) Sdn Bhd, which was founded in 1984. “In the past, we didn’t have that kind of pressure. But now, to keep up with these international players, we have to look at them, learn from them and, in some cases, try to [adopt or replicate] some of their technologies.”

ABX has since upgraded its tracking system and automated its processing centre, while incumbents like City-Link Express (M) Sdn Bhd — which was established in 1979 — have strengthened their back-end systems, automated sorting, and rolled out real-time tracking, fleet monitoring and customer-facing tools.

Meanwhile, Pos Malaysia Bhd (KL:POS) — which has a history dating more than 200 years — is investing in automation and data-driven systems to improve delivery efficiency across its nationwide network.

But while local operators have heavily invested in modernising their technology assets, the ability to sustain funding these upgrades over the long run is increasingly in doubt, say interviewees.

The same liberalisation, which introduced competitive technology standards, has also licensed more than 100 operators into the market, triggering a price war that has since eroded the market share of many local players, stripping margins to the bone. Higher wages, fuel costs and compliance burdens have exacerbated the pressure.

“Low pricing limits the ability of operators to reinvest in critical areas such as fleet renewal, infrastructure upgrades and service quality improvements. If prolonged, this trend may impact overall service reliability, operational resilience and industry stability,” says Mohammad Shammairji.

“Price undercutting is a very real issue in the current market landscape. There are instances where operators are pricing services at levels that are not commercially sustainable in the long run. This has led to a significant drop in average delivery rates across the market. To put this into perspective, a few years ago, the average delivery rates were around RM7 to RM8 per parcel. Today, in certain segments such as e-commerce, rates have dropped to below RM4.”

Unable to withstand the intense competition, Nationwide Express, Pgeon Delivery and Flash Express Malaysia have exited the market.

Pos Malaysia has been in the red since 2018, a situation that CEO Charles Brewer attributes to the unsustainable cost of delivering its universal service obligation (USO) combined with the pricing war in the parcel segment.

Last November, Minister of Communi–cations Fahmi Fadzil said the Malaysian Communications and Multimedia Com–mission (MCMC) — the body that regulates the postal and courier services industry — was studying a proposal to introduce a mandatory floor price for courier services.

A non-binding reference price guideline, including a suggested floor price of RM5 for small parcels, was introduced in December 2024. However, without legal enforcement, it has been largely disregarded by the industry.

The government also announced the Postal Services Fund (PSF) — a RM50 million mechanism established last October by MCMC to secure the long-term sustainability of postal services, particularly in rural and underserved areas served by Pos Malaysia under its USO. The national post and parcel service provider is working with the regulator on developing a modernised Postal Services Act, which includes the necessary framework to compensate the USO provider.

Industry players say clarity is also needed in the design and implementation of USOs and the PSF.

Adding to this, the courier, express and parcel market is now both crowded and concentrated. “On the one hand, it’s a crowded space with more than 100 licensed players, but on the other hand, it’s dominated by just a handful of giants,” Brewer notes.

As at Oct 15 last year, J&T Express and SPX Express accounted for 73.5% of total parcel volume among the 102 courier companies licensed by the MCMC, Fahmi was reported as saying.

Local courier companies are increasingly calling for structural and regulatory reforms to level the playing field in an industry reshaped by liberalisation, e-commerce growth and rising operational costs. These include stronger and more targeted licensing frameworks, amendments to the Postal Services Act 2012, and introducing industry-led initiatives such as the Courier Network Sharing Framework (CNSF) to reduce duplication and improve efficiency.

The Association of Malaysian Express Carriers (AMEC), the industry body representing domestic express carriers, has consistently advocated for a comprehensive review of the licensing framework. At present, the industry operates under a framework introduced years ago.

“The courier landscape has changed dramatically due to e-commerce growth, market liberalisation and rising operational costs. A refreshed framework is necessary to ensure that licensing remains relevant, effective and aligned with today’s industry realities,” says Ronald Tan, president of AMEC and CEO of City-Link Express.

ABX’s Mohammad Shammairji adds: “Future licensing frameworks should consider factors such as service standards, financial strength, network capability and operational readiness, not just the ability to enter the market. In addition, there is a need to strengthen guidelines around automation adoption, data governance and fair labour practices to create a more level playing field. A clearer regulatory framework will help move the industry away from price-driven competition towards value-based growth.”

For Clarence Leong, CEO and co-founder of Easy Parcel Sdn Bhd, an online booking platform for parcel delivery, the heart of the conversation is not licensing for its own sake but whether customers actually get what was promised.

“I see MCMC’s role more as setting the national direction and ambition for the next three to five years — for example, targets around overall service reliability, on-time delivery rates or complaint resolution — while allowing each courier to design its own product and SLA (service level agreement) based on network and strategy,” he says.

“That way, each service provider can still differentiate on speed, coverage and price, but the outcomes for Malaysian consumers and SMEs (small and medium enterprises) move towards a common national goal of higher reliability and better experience.”

Lin Zheng, CEO of Singapore-headquartered Ninja Logistics Sdn Bhd, one of the players that entered the Malaysian market in 2015, says a modernised framework could focus on three areas: financial and operational capability to ensure reliability; minimum service quality and customer protection; and clear principles that support fair and transparent competition.

“More importantly, targeted licensing is not about restricting growth or limiting competition. It is about creating a level playing field that encourages long-term investment, innovation and consistent service standards, while ensuring the courier ecosystem can meet the needs of consumers and SMEs,” he says.

Meanwhile, Khairil Ahmad, vice-president of government affairs at e-commerce platform Lazada Malaysia, says the discussion should not be reduced to one predicated on a local versus foreign lens.

“Such framing often oversimplifies the complex realities of the industry. Instead, the more meaningful question is which operator can consistently deliver on the metrics that matter in a performance-led market: strong service, nationwide reach, operational resilience, reliable tracking and the ability to scale sustainably during peak periods in a fast-evolving market,” he says.

Meaningful regulation should protect consumers and uphold service standards, reflect the reality that operators today work through different models and support sustainability without unintentionally raising costs for sellers and shoppers or slowing down innovation, adds Khairil.

“This is why any regulatory reform must be evaluated carefully, with clear evidence of its impact on service quality, affordability and competition. The need for scrutiny is even greater in an environment where cross-border e-commerce is already shaped by other tax measures.”

On its part, AMEC is taking steps to address structural gaps in the industry. One initiative is the Courier Network Sharing Framework, an industry-led effort jointly developed with MCMC to optimise line haul, hub and route capacity, reducing duplication and improving national efficiency.

Through network sharing, the industry can consolidate deliveries, reducing the number of vehicles required while improving efficiency and lowering costs, says AMEC’s Tan. This approach also enhances customer experience by reducing the frequency of multiple couriers visiting the same address.

AMEC has also collaborated on the National Address Database, a centralised system designed to reduce failed deliveries and improve service accuracy. It also advocated for the inclusion of courier riders under the Budi95 fuel subsidy programme to help stabilise operating costs and support last-mile workforce sustainability, and has engaged the Malaysia Competition Commission on market concentration, below-cost pricing and the need for a balanced competitive landscape for both local and foreign players.

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