21 November 2019, Thursday | 05:42pm

Pos Malaysia weighing options on rate hikes

2019-10-14

 

KUALA LUMPUR: Pos Malaysia Bhd is evaluating proactive options in the wake of the United States’ demands of setting its own postal rates next year with other countries’ expected to follow suit.

It is learnt that Malaysia had sent two representatives to the Universal Postal Union’s (UPU) extraordinary congress in Switzerland recently, joined by 800 others from more than 130 member countries, to deliberate on the future of the postal remuneration system.

Although the US decided to stay in the UPU, global postal rate changes were coming, according to some observers.

The ripples from this development have been felt by postal delivery services worldwide, especially Pos Malaysia whose rates had not been revised for close to a decade.

According to a source, Pos Malaysia management team had privately acknowledged that a significant paradigm shift had and was occurring within the global postal regime.

Pos Malaysia believes that, like other countries’ postal operators, it needs to work towards operating in an open market, said the source.

"As the UPU terminal due system for packet exchanges is changing towards a more commercially-driven cost based system, Pos Malaysia is also currently considering transforming the rates setting regime for both domestic and international packages towards deregulation," he added.

The last time Pos Malaysia’s rates were raised was in 2010, when standard mail weighing under 20g was set at 60 sen (from 30 sen previously).

The previous rate had been kept since 1992.

 

Pos Malaysia Bhd is evaluating proactive options in the wake of the United States’ demands of setting its own postal rates next year with other countries’ expected to follow suit. NST pix by MUhammad Sulaiman

 

When contacted, a spokesperson for Pos Malaysia said the company is working closely with all relevant parties to help the public and businesses brace the huge impact from the potentially high postal rates and the instability of the global postal system.

Pos Malaysia said deregulation consideration is a possible option to cushion the potential rise of postal and parcel rates globally.

The company emphasised that "albeit the revision of rates that come into agreement, its priority is to continuously provide the affordability of postal services to all users.

Pos Malaysia also assured that it would not lose sight of its transformation agenda while continuing to address the challenges and minimise the impact for Malaysian consumers and businesses.

“This will be built upon Pos Malaysia’s unmatched distribution network and the vast opportunity to develop new digital businesses for its customers,” the spokesperson said.

An emergency congress of the UPU was held in Geneva, Switzerland on September 24, following president Donald Trump’s threat that the United States would withdraw from the group.

The UPU is a specialised agency of the United Nations which coordinates postal policies among member nations worldwide with regards to the global postal system.

Trump’s demands were that if the group’s 192 members did not agree to reform the rates countries charge each other when delivering mail and packages across borders, he would carry out what industry observers has termed as “Trump’s global ‘brexit’” or “prexit”.

The Pos Malaysia spokesperson, however, declined further comment when pressed on what the company’s current plans were following the UPU emergency congress.

He opined that liberalising the postal system should be a key measure to consider for Pos Malaysia, so that it can work towards “striking a balance between its delicate responsibilities of providing national postal service, while remaining competitive within the postal industry”.

However, it is learnt that Pos Malaysia is practical about its survival, especially given its biggest-ever net loss posted last year.

For its financial year ended March 31 2019, Pos Malaysia recorded a net loss of RM165.7 milliion.

Its chief executive officer Syed Najib Syed Md Noor attributing it to 'the continuing decline in mail volume (13 per cent year-on-year), coupled with high costs related to serving the Universal Service Obligation under the UPU”.

Pos Malaysia senior management, it is learnt, had been holding urgent meetings with stakeholders in recent days – inclusive of government representatives – to explore various avenues to brace the public and businesses for a potential price hike.

The source emphasised, that despite industry challenges, Pos Malaysia’s priority is to ensure affordability of mail services to the rakyat.

This is a key challenge as Pos Malaysia is not at all subsidised by the government.

“Perhaps the solution here would be for Pos Malaysia to move towards a ‘hybrid system’,” he said.

“It could be that Pos Malaysia maintains its current pricing for the rakyat, but increase prices for businesses in line with the open economy and deregulation,” he added.

“Once this ‘mail drag’ issue is resolved, Pos Malaysia can then move forward on its ongoing transformation journey to enhance quality of postal products and services while improving productivity and operational efficiencies,” he said.

 

 

Source: News Straits Times

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