Brewer: Pos Malaysia is a fantastic company. The problems we encounter have nothing to do with the team. While we want to strike a balance where everyone is happy, we also have a responsibility to be fiscally sustainable. — IZZRAFIQ ALIAS/The Star
Once the beating heart of national communication and commerce, government postal services today find themselves stamped with a host of challenges.
Inboxes have replaced mailboxes and the volumes of letters have slowly dwindled, all while costs climb, infrastructure creaks, and private couriers race ahead in an attempt to win competition.
Pos Malaysia is no exception to this global trend, and having been around for more than 200 years, has had to face the uphill task of staying relevant in a rapidly digitalising economy.
Group chief executive officer Charles Brewer recently sat down with the local press, explaining the different strategies and initiatives the national post and parcel service provider has embarked on in order to achieve a turnaround.
Brewer says in the last four to five years, Pos Malaysia has registered losses to the tune of RM1.2bil, but this has really boiled down to the fundamentals and structure of the postage system in the country.
Pos Malaysia is merging mail and parcel networks, targeting 20% to 30% cost savings through optimisation, greener fleets, three-wheelers and expanded motorbike capacity for higher productivity.
He says, akin to other nations, challenges are rife. These include a massive dip in letter writing.
“In 2012, we delivered about 1.3 billion letters. In 2024, it was down to 300 million. It is a problem because each letter equals revenue.
“To add to that, the number of addresses we have to deliver to, keep increasing,” he says.
Brewer explains the mandatory need to deliver to every new housing estate or apartment block falls under the Universal Service Obligation (USO).
A quick Google search will tell you regulation requires postal services like Pos Malaysia to provide services regardless of its location or potential profitability.
Brewer says because of this, the group already faces a loss when they open their doors first thing in the morning.
“We still do letters, but about 95% of that are business correspondence ones, so letters from Indah Water or electricity bills from Tenaga Nasional Bhd
. We estimate that by 2030, the volume of letters will hit below 150 million,” he notes.
Now, on to the second challenge where Charles says footfall traffic into physical post office stores have drastically decreased because of technology.
“We have over 620-owned post offices which we run ourselves, with 2,200 employees.
“While we still get about a million people coming in every month, but for the most part, you can do the majority of things you want to do on your phone – just like sending an email instead of a letter,” he says.
So, with 38% less people walking into post offices post-Covid, Pos Malaysia is still required to keep its post offices open despite rental, salaries and utilities going up.
Brewer says the third challenge is something that can shift in time, and he is very hopeful that there will be some clarity soon enough.
He explains that parcels are the future, it is something Pos Malaysia knew would reshape their core business. He adds that the parcel industry is growing a steady 12% yearly.
“There is an unusual structure in terms of parcels. People buy online, whether it is from Shopee, Lazada or TikTok, to name a few.
“Now what happened a few years ago is, these platforms stopped giving customers the option to choose their courier provider, but rather, automatically gave it to theirs. This meant Shopee Express, or Lazada Express,” Brewer says.
Statistically, he says 67% of the parcel market is from online, and 70% from the 67% is directly given to private logistic companies.
“This simply means we are playing in a much smaller space, and this method is something I do not agree with. In 2021, when I first started here, I remember customers being able to choose which courier provider they wanted,” he says.
Brewer explains this method, better known as “masking”, has shone a big spotlight on the anti-competition concerns within the industry. Discussions are already on the table with Malaysian Communications and Multimedia Commission and regulators to mitigate this.
However, Brewer makes it known that Pos Malaysia isn’t one to take matters lying down. Since August 2021, the company has been on a journey to transform and carve itself out a stronger role.
With that, it will implement three strategies at an accelerated pace, he says.
The first point of focus was the company’s delivery networks. Brewer said that running separate systems for mail and parcels was so inefficient, a merger became the only logical solution.
“Our network optimisation is already at 45%. There’ll be less vehicles on the road which is not only good for costs but also sustainability. We foresee that we can improve our costs by 20% to 30%,” he says.
Pos Malaysia has also recently completed a proof of concept for a three-wheel vehicle; while it won’t be used in all locations, the company anticipates higher productivity and lower costs.
Motorbikes that used to only deliver mail can now carry about 26 parcels per day.
“There are other opportunities all the way through the supply chain, where merging will create improved efficiencies. The bigger piece will start in the first quarter of next year,” he says.
To mitigate the issue of lesser footfall, Brewer says they will now test a new network model of agents, alternatively called pick-up and drop-off (PUDO) points.
He says PUDO agents will offer the same services as post offices do, except ASNB, shared banking, remittance, and road tax and licence renewal. The plan is to close eight post offices and replace it with 13 PUDO points, Brewer says.
“We will ensure the consistency of service through training, support and auditing. Customers will not lose their service. In fact, they will enjoy more convenience with more locations and longer operating hours,” he says.
These agents will also not be very far from the post offices, likely a kilometre or two away.
Should this work, more PUDO agents from different companies will come onboard.
And finally, Pos Malaysia will test out delivering mail alternate working days, starting with Sungai Siput, Perak. Brewers acknowledge there may be an emotional response to this, but essentially looking at how many times people actually check their mailboxes today, it shouldn’t be any cause for concern.
“The demand for mail has changed today. We’ll begin the test in Sungai Siput in November where we currently have nine delivery routes.
“This will run until January next year, and in February 2026, we will make the call to see if it works before we start rolling it out across the country,” Brewer opines.
Meanwhile, Brewer is optimistic that there will soon be a time when the postal service goes back into the black.
“Pos Malaysia is a fantastic company. The problems we encounter have nothing to do with the team. While we want to strike a balance where everyone is happy, we also have a responsibility to be fiscally sustainable. All these initiatives are aimed at doing just that, and I am optimistic about turning things around.”
