14/09/2026

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MONDAY | SEPT 14, 2026

Malaysia, Russia strengthen strategic ties, explore new cooperation KUALA LUMPUR: Malaysia and Russia continue to strengthen strategic ties through high-level diplomacy, including by exploring new opportunities in the fields of economy, trade, and investment that offer mutual benefits to both nations. Prime Minister Datuk Seri Anwar Ibrahim and Russian President Vladimir Putin on the sidelines of the 18th BRICS Leaders’ Summit. nations. According to him, the strategic ties established must be translated into economic opportunities, quality investments, and tangible benefits for the people.

exploring new potential in economic, trade, and investment relations, as well as cross-sector cooperation, aligning with Malaysia’s efforts to expand its international economic and diplomatic networks,” he said in a Facebook post. He added that under the Prime Minister’s leadership, Malaysia continues to pursue an open, pragmatic, and principled diplomatic approach while fostering good relations with all

He noted that the meeting reflected the flourishing Malaysia-Russia relationship and demonstrated both countries’ commitment to bolstering cooperation in strategic areas of mutual interest. “The discussions also paved the way for

“Malaysia will continue to stand as a sovereign and respected nation, ready to cooperate with all parties based on national interests, peace, and shared prosperity,“ he said. – Bernama

Human Resources Minister Datuk Seri R. Ramanan stated that this matter was among the key focuses of the bilateral meeting between

Brighter days for Pos Malaysia but huge challenge remains

Ű BY HAYATUN RAZAK

KUALA LUMPUR: Pos Malaysia Bhd’s improving performance offers some encouragement, but the national postal services operator still faces a deep challenge despite its nationwide network being financially sustainable, with traditional mail continuing to decline and delivery costs rise. The group’s parcel volumes surged 34.3% year-on-year in the first half of 2026 (H1’26), helping revenue to rise 8.2% to RM982.7 million and narrowing loss before tax by 30.6% to RM55.4 million. More importantly, operating cash flow turned positive at RM18.3 million, compared with a RM64.6 million outflow a year earlier. Yet the improvement masks a more complicated picture. The postal segment, which includes mail, courier and retail, remained deeply loss-making, recording a RM74.9 million loss before tax in H1’26, compared with RM74.1 million previously. In the second quarter alone, the segment’s loss before tax widened 39.9% year-on year to RM55.2 million despite the 34.3% increase in parcel volumes. For group CEO Charles Brewer, the problem is not simply a lack of parcel volume. “The fundamentals are improving. We’re growing parcels, improving service reliability, strengthening cash generation and becoming a more efficient business. That’s what gives us the confidence that the progress we’re seeing is sustainable,” he told SunBiz . Brewer attributed the improvement to stronger parcel momentum, improved service reliability, network productivity, pricing discipline and better use of data, digital tools and automation to improve planning, customer experience and operational efficiency. But structural pressures confronting the postal That combination means fewer letters have to be delivered across a larger and increasingly dispersed address base, while the cost of providing the service continues to rise. “Mail has declined 81% since 2012 and continues to do so, while the cost to deliver mail increase every year on the back of salary increases and increasingly less density driven by a delivery address growth of 57% since 2012,” Brewer said. “This is a structural shift that will not change and will only become more challenging.” The same pressure is visible in Pos Malaysia’s physical retail network. Brewer said retail footfall has fallen 41% since 2019, while the group continues to bear the costs associated with maintaining the retail network required under its universal service obligation (USO). That leaves Pos Malaysia facing an increasingly difficult equation where traditional mail is shrinking, the physical network remains expensive to operate, while the faster-growing parcel business does not automatically produce sufficient margins to offset those structural costs. “Points 1 and 2 are not unique to Pos business remain considerable. Brewer said traditional mail has declined 81% since 2012, while the number of delivery addresses has increased 57% over the same period.

o Operating cash flow turns positive, network financially sustainable although structural pressures still considerable

Malaysia,” Brewer said, referring to the decline in mail and retail, adding that for many postal operators “the cost of delivering the USO (read as mail and retail) is becoming increasingly unsustainable.” The parcel market itself presents another set of challenges. Although Malaysia’s e-commerce economy is generating strong parcel volumes, Brewer said the structure of the market makes profitability difficult for carriers. He said 80% of parcels originate from e commerce platforms, with 70% of those parcels being handled by the platforms’ own delivery networks. “Consumers have zero choice on who delivers their parcels.” At the same time, while the regulator has established a reference selling price for courier services, it is not mandatory. Brewer said the combination of platform price below which carriers cannot sell, as well as the removal of “masking” so consumers can choose their delivery provider. The issue is significant because parcel growth is increasingly central to Pos Malaysia’s strategy of transforming itself from a traditional mail company into a more diversified logistics and delivery business. But the company’s latest numbers suggest that simply shifting volumes from letters to parcels will not be enough. The postal segment’s H1’26 revenue rose only 3.5% to RM541 million despite the 34.3% increase in parcel volumes. The company said the improvement was driven by higher courier contributions, while declining mail and international volumes and operating cost pressures continued to weigh on the segment. This is where the USO becomes critical. Pos Malaysia remains responsible for maintaining nationwide postal services, including in areas where the economics of delivery are weak. Brewer said the company currently receives no compensation for fulfilling the USO. He said Pos Malaysia is working with the government and the regulator on a framework dominance, insourcing, lack of consumer choice and non mandatory reference price means “it is very difficult to make a profit in the parcel sector in Malaysia and few do”. Pos Malaysia, together with the Association of Malaysian Express Carriers, has therefore advocated a mandated selling

that would be “fair, transparent and accountable” and recognise the actual cost of providing the universal service while still holding Pos Malaysia accountable for efficiency, service quality and performance. The proposed framework, he said, needs three components: “a modernised Postal Services Act, a fair USO funding methodology, and an effective Postal Services Fund.” The regulatory question therefore goes beyond simply changing the rules governing postal operators. For Pos Malaysia, it could determine whether the company’s nationwide network can remain financially viable as the underlying demand for traditional postal services continues to contract. Brewer said the company is working on modernising the Postal Services Act, establishing a transparent methodology to assess the cost of the USO and operationalising an effective Postal Services Fund. “There are plenty of benchmarks and already existing approaches that both the regulator and the sector can leverage,” he said, with the objective of ensuring the postal service remains sustainable for Malaysians over the long term. While regulatory reform remains outside Pos Malaysia’s direct control, the group is also attempting to change the economics of its own network. One of the more significant experiments has been alternate-day mail delivery. What began publicly as a pilot in Sungai Siput has since expanded into tests across 11 locations. “We have now tested the alternate day delivery new business model across 11 locations, and the results have been very encouraging,” Brewer said. The objective, he stressed, is not simply to reduce the number of days mail is delivered. “The proof of concepts were never just about reducing delivery days,” he said, but about understanding how Pos Malaysia can maintain a reliable nationwide service “where people are receiving fewer letters and significantly more parcels”. The pilots showed opportunities to improve network utilisation while maintaining service quality, he said, although Pos Malaysia has yet to commit to wider implementation. Any broader rollout would need to balance customer requirements, service standards, regulatory obligations and operational efficiency. In other words, the company is trying to turn a shrinking mail network into a more flexible delivery infrastructure capable of handling the

growing parcel business. The same emphasis on capital discipline can be seen in its decision to shut all 50 Pos Shop outlets in July. The closure is particularly revealing because customer satisfaction was not the problem. Brewer said the format recorded a Retail Net Promoter Score of 97.6. But strong customer sentiment did not translate into an adequate financial return. “At scale, the format was capital- and cost intensive and did not meet the return threshold required by the business,” he said. The experience has reinforced a more disciplined approach to diversification, with Brewer saying Pos Malaysia needs to continue testing new formats while being prepared to stop those that do not create sufficient value. The group is also investing in infrastructure intended to improve the efficiency of its core operations. Pos Malaysia’s RM256 million National Mailing and Parcel Hub is expected to be fully operational in October and is estimated to generate about RM8 million in annual savings. Brewer says Pos Malaysia is attempting to change the economics of its network.