A light rail transit (LRT) train pulls away from the platform at the Putra Heights terminal station, embarking on its familiar route across the Klang Valley.
But instead of the usual rush of daily commuters, its carriages are occupied by hefty trolleys filled with parcels of various sizes.
Upon reaching the designated station, the parcels are unloaded and handed off to a driver, who ferries them via an electric bike or electric van to their individual delivery locations.
This operation is part of a recently introduced last-mile delivery solution by Diolko, a company seeking to transform the urban transportation of goods by leveraging existing public transport networks and electric vehicles (EVs).
The first of its kind in South-East Asia, the end-to-end delivery system was developed to provide a more efficient and sustainable urban logistic solution that will help alleviate traffic congestion and reduce carbon emissions.
“What sets Diolko apart is our forward-thinking approach. We embrace innovation by optimising existing assets in the city such as public transport systems for greater efficiency and impact,” says Yoann Gueguen, chief executive officer (CEO) and co-founder of Diolko.
The idea for the pioneering solution came about when Gueguen and co-founder Onno Pfeiffer saw that challenges in their respective industries could be addressed through strategic collaboration.
“Yoann comes from the public transport sector where there is an abundance of capacity. While trains are full during peak hours, there’s a lot less demand during off-peak hours,” explains Pfeiffer, who is also the company’s chief operating officer.
“I come from the logistics industry which has a shortage of capacity. We figured, why not make use of the public transport that’s already in motion around urban areas, and tap into that to solve problems in logistics?”
The result is a fully electric delivery model that incorporates virtual hub technology and EVs to facilitate large-scale parcel transportation while lowering environmental impact.
Goods are picked up from warehouse via electric van and brought to Diolko’s hub at the Putra Heights station, where they are sorted and placed in the company’s proprietary trolleys that are specially designed for public transport use.
During the night, a dedicated train brings the trolleys to the station closest to the parcels’ end destination. In the morning, parcels are delivered to their final recipients by EV.
In July this year, Diolko partnered Prasarana to launch its pilot programme, LRT Parcel Project.
Running until January 2025, the initiative integrates rapid KL rail networks, making use of key stations along the LRT Sri Petaling Line and LRT Kelana Jaya Line.
Since the programme’s launch, the business has reportedly achieved a 70% reduction in carbon emissions for its customers. It operates at a capacity of 2,500 parcels per month, with plans to reach 75,000 parcels monthly within the next six months.
Gueguen shares that Malaysia was chosen as Diolko’s launch market due to its strong eCommerce demand and its extensive urban rail infrastructure that would be capable of supporting the solution.
“We also needed a place that had an appetite for innovation and was open to change, and Malaysia checked all the boxes,” he notes.
Plans are in place to expand Diolko’s operations to 15 stations across Klang Valley.
Beyond this, the company is exploring how it can replicate its model in other cities in Malaysia as well as in other South-East Asian countries.
“For now, we are focused on expanding the concept here in Klang Valley and gaining more customers,” Gueguen says.
The company’s clients represent a range of sectors such as eCommerce, retail and logistics, he reveals.
“They have different requirements, but what they have in common is that they prioritise green solutions, quality service, reliability and transparency of data – all of which we provide.”
Gueguen points out that Diolko’s rail based solution allows it to cater to diverse customer needs including reverse logistics. “What is unique about the train is that it travels both directions, so we are able to really optimise our usage of it.”
However, innovating a distinct concept such as Diolko’s comes with its own set of challenges. Pfeiffer shares that the trolleys currently in use had to be designed from scratch as there was no available hardware solution to carry goods on a light rail train.
“We created six generations of trolleys, and it had to be approved by APAD or Land Public Transport Agency,” he says. “It was highly important to ensure that it could be secured on public transport safely and that it wouldn’t move or cause any damage.”
The company also had to develop its own logistic software, as there was no off-the-shelf software option that took into account public transport-based operations.
Another key aspect of the process has been working with Prasarana to assure that operations will be conducted in a safe and non-disruptive manner.
“We’ve done several tests and have jointly defined a standard operating procedure with them,” Pfeiffer says. “Their key priority is the passengers, so one of our main principles is to make sure we do not impact their work or the commuters’ journeys.”
Reflecting on Diolko’s journey, he shares that it has been gratifying to have the support of Prasarana and the Transport Ministry in this endeavour.
Additionally, the response from customers in the market has been overwhelmingly encouraging.
“The nice thing is we now have a proof of concept, having met our KPIs without any incidents, delays, or complaints,” Pfeiffer says.
“It will put us in a good position to convince other operators down the road as we have a true test case that people can visit and see for themselves.”
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