Malay Chamber: Courier floor pricing must consider realities faced by rural entrepreneurs

 

THE proposed floor price for courier services by the Malaysian Communications and Multimedia Commission (MCMC) must be carefully and comprehensively reviewed as it could have a disproportionate impact on rural and non-urban entrepreneurs, particularly micro, small and medium enterprises (MSMEs).

This is given that the cost structure and level of reliance on courier services among rural entrepreneurs are significantly higher compared to those operating in major urban centres, according to the Malay Chamber of Commerce Malaysia (DPMM) president Norsyahrin Hamidon.

“Without appropriate balancing mechanisms, the imposition of a courier floor price risks slowing rural economic participation and contradicts the nation’s inclusive development agenda,” he observed.

Malay Chamber of Commerce Malaysia (DPMM) president Norsyahrin Hamidon

On this note, DPMM stressed that e-commerce has become a key driver of economic mobility for entrepreneurs in Sabah, Sarawak, the East Coast and the northern regions of Peninsular Malaysia.

However, setting a minimum courier price could widen the cost gap between urban and non-urban sellers as economies of scale and market density continue to favour urban areas.

Spiralling biz costs burdened MSMEs

In addition, DPMM pointed to rural entrepreneurs already facing higher logistics costs due to longer delivery distances, lower delivery frequency and limited network coverage.

A uniform floor price that does not account for these realities risks further increasing operating costs and eroding the already thin profit margins of rural MSMEs.

DPMM further cautioned that a mandatory floor price could raise overall service costs and weaken entrepreneurial incentives, particularly among micro traders and informal sector operators in rural areas.

For this reason, greater investment in infrastructure is crucial to improving overall operational efficiency which in turn would enable the delivery of higher-quality services with greater reliability.

With more efficient systems and facilities in place, operating costs can be reduced, thus allowing service providers to offer more affordable services without compromising quality while also benefiting both businesses and end consumers.

From a digital inclusion perspective, DPMM emphasised that access to affordable logistics is a critical pre-requisite. A sharp increase in delivery costs risks reversing progress in bridging the digital and economic divide between urban and rural communities.

But MSMEs located outside Kuala Lumpur and major cities also face the risk of losing competitiveness even when offering unique local products with strong national and international market potential as e-commerce markets are highly sensitive to final prices paid by consumers.

“A more flexible and inclusive approach is believed to be capable of safeguarding the sustainability of the courier industry without undermining the agenda of empowering rural economies and Malay entrepreneurs,” added Norsyahrin. –  Focus Malaysia