Who bears the cost of delivery?

MALAYSIA’S plan to amend the Postal Services Act 2012 is timely, but it also comes after the industry has already evolved far more quickly than the law.

A decade ago, postal services still meant letters, official notices and conventional mail.

Today, the business is largely about parcels.

Online shopping has changed how people buy, how businesses sell and how quickly deliveries are expected to arrive.

This explains why the government wants to revisit the law, particularly the definition of universal service obligation (USO).

Communications Minister Datuk Fahmi Fadzil recently said amendments to the Postal Services Act 2012 are expected to be tabled in Parliament by year-end.

He added that the bill is being drafted for submission to the Cabinet, with updates reflecting new developments in courier services and the wider eCommerce ecosystem.

While that sounds straightforward enough, once the discussion moves beyond definitions, tougher questions begin to emerge.

For years, the USO has been tied to the principle that postal services must reach all parts of the country, including areas where delivery is costly and commercially unattractive.

That role has largely fallen to Pos Malaysia Bhd, which continues to serve locations many private operators would rather avoid due to low volumes and high operating costs.

The challenge now is that parcel delivery has become the core business, with much of the growth benefitting private courier firms, especially those linked to large online platforms.

If parcel services are formally brought into the USO framework, policymakers will have to decide whether the burden should still rest mainly on one operator or be shared across the wider industry.

As it is, the courier market is no longer a simple one.

Competition is intense, margins are thin and pricing has become increasingly aggressive.

While consumers benefit from low delivery fees, this raises questions about the sector’s long-term sustainability.

There is also the issue of labour.

Behind every low-cost parcel is a network of riders, drivers and warehouse workers working under pressure to meet ever tighter delivery windows.

Worker welfare has been flagged in the amendment exercise, but whether this leads to meaningful safeguards remains to be seen.

At the same time, the sector is becoming more concentrated.

Large players with access to platform-driven order volumes have obvious advantages, while smaller operators face increasing pressure to stay relevant.

That is why postal reform should not be treated as merely updating an old law.

The delivery business today sits at the centre of Malaysia’s digital economy.

How it is regulated will not only shape competition, but also how fairly the cost of nationwide connectivity is shared.