Nobody built the moat.
They asked for a fence.

A local news page ran the numbers this week and the comments filled up with the usual argument: foreign players are dumping prices, the government must protect local couriers. I have a different view, and I earned it the hard way — from inside one of the local companies.

What I saw from the inside

Years ago I worked with a family-owned local courier. I will not name it. What I remember is what was missing.

No research and development. No system worth the word — the technology was whatever kept the trucks moving and the invoices out. And underneath the whole operation, one strategic assumption, never written down but visible in every decision: cheap foreign labour would remain the competitive advantage indefinitely.

That was the moat. Not routing intelligence, not network density, not automation, not data. Just a wage line, and the confidence that it would stay low forever. You cannot build a defensible business on somebody else’s poverty. It is not a moat — it is a temporary discount, available to every competitor who shows up with the same idea and a bigger cheque.

The cold chain that stops at the highway

Cold chain logistics was worse. I have watched operators promise nationwide temperature-controlled delivery and then quietly deliver only along the main highway. Off the trunk road, the service thins out or simply does not exist.

Think about what that means. Cold chain is the premium segment — the one with pricing power, the one every commodity parcel player is now scrambling toward. And even there, the local build stopped at the easy geography. Nobody invested in the hard kilometres, because the hard kilometres cost money this year and pay back in five.

Now look at what is landing in Johor. In November last year a Shanghai-listed Chinese frozen-food group signed an agreement covering up to RM10 billion of investment in the state — halal frozen food, pharmaceuticals and nutraceuticals, ingredients, and the logistics to move all of it — aligned to Johor’s halal development plan and the Johor-Singapore Special Economic Zone. The export ambition attached to it is RM100 billion.

In that same state, the largest Malaysian-led cold-chain build I can find is a RM65 million automated warehouse. Let me be fair about the comparison: the RM10 billion spans five sectors and is at agreement stage, while the RM65 million is one specific facility going up now. Correct for all of that and the ambition gap is still two orders of magnitude.

Here is the uncomfortable part. Cold chain in Malaysia is not a market anyone had to explain to a local operator. We know this market better than any foreign entrant ever will — the geography, the halal requirements, the wet-market culture, the port logic, which roads flood in November. We had the knowledge and the head start. Somebody else brought the capital and the patience, and will now own the asset that the knowledge was supposed to protect. Knowing the market is not a business. It is a briefing you hand to whoever funds the plant.

The fence they asked for

So what happened when foreign-backed capital arrived and priced parcels below cost?

The industry did not out-build them. It went to the regulator. The proposed licensing framework includes a tier — call it what it is — that would cap a licensee at under 50 million parcels a year and limit its delivery branches to half the districts in Malaysia, while another tier carries no volume ceiling at all. There has been a separate push to limit foreign ownership, which drew resistance from within the industry itself. Meanwhile the RM5 reference floor price for small parcels, introduced in December 2024, was largely ignored because it was never binding.

A friend of mine was on the other side of this — one of the foreign entrants. Flash Express shut its Malaysian operation on 31 January 2026.

I want to be precise: I am not claiming lobbying alone killed it. Predatory pricing is real, and a floor price is a legitimate policy instrument. But look at the pattern of effort. When the competition got hard, the energy went into the licence, not the network. Protection is a slow death, and this industry has been dying slowly in public for a decade.

Bonus, not barrier

Here is my read on why, and it is not flattering. The people running these businesses are optimising for this year’s bonus, not next decade’s entry barrier.

An entry barrier costs money now — automation, systems, engineers, a data layer, the unprofitable rural routes that make you the only one who can serve the whole country. It shows up as capex and depresses the number your bonus is calculated on. A regulatory cap costs a few meetings and produces the same protective effect on paper. If you are measured annually, the choice is obvious. If you are trying to own an industry, it is suicide.

Look at what the balance sheets actually say. Pos Malaysia has been in the red every quarter since September 2018 — RM132 million of losses in nine months last year alone. GDEX has been losing money since early 2022. Ninja Van Malaysia lost RM83.4 million in FY2023 alone.

Now look at J&T Malaysia: losses of RM179 million, then RM45 million — and then a RM70 million profit. Roughly RM224 million burned, deliberately, and then the market flipped. That was not luck. Those losses were an entry fee, paid by people who intended to still be here in ten years. The local players paid a similar bill in losses and bought nothing with it.

The second-generation problem

I will say the part people say privately. Many of these local logistics firms are now run by the founder’s children, and the second generation is not competing.

This is not a Malaysian invention — every economy with old family money has a phrase for it, and ours is 富二代. But the mechanism is not laziness. It is arithmetic on risk. The founder started with nothing, so betting everything cost him nothing he could not rebuild. The son starts with a working company, a paid-off warehouse and a lifestyle attached to the dividend. For him, a nine-figure bet on automation risks something real and gains something abstract.

The rational move for the inheritor is to preserve. The rational move for the industry is to build. Those are not the same move, and the gap between them is precisely where foreign capital walks in.

Preservation looks responsible from the inside. It is also how you end up licensed, comfortable, and holding a quarter of a market you used to own.

I am 42 and still waiting

Here is the sentence I keep coming back to. I am forty-two years old, and in my working life I have not seen a Malaysian courier player invent anything that grew the industry. Not a system others adopted. Not a technology that reset the cost curve. Not a service category that did not exist before.

The mindset is pasar malam: rent the lot, undercut the neighbour, go home, repeat tomorrow. That works at a night market. It does not work in an industry where the winner is decided by capital intensity and unit-cost engineering. The playbook expired, not the people — but somebody has to notice the expiry date.

The next round is already loading

And the next round will be less forgiving, because it is a technology round.

Sorting automation. Robotics in the hub. Driverless line-haul between distribution centres. Route optimisation that shaves cents off millions of parcels. Every one of those is a capital-and-engineering problem, and every one of them permanently lowers the cost floor for whoever gets there first.

Look at who is already spending. One of the two dominant players just opened a 30,000-square-metre sorting centre carrying RM63.2 million of automated sorting equipment. That is the shape of the next barrier — and it is being built right now, by the side that was never asking for a fence.

Whoever dares to invest, gains the experience. Whoever gains the experience, leads. There is no third path where you wait, stay cheap, and get handed the industry.

To be fair to the local players

Two honest points against my own argument.

First, capital access is genuinely asymmetric. A regional player backed by billions in private capital can absorb RM179 million of losses in a single year; a family-owned Malaysian firm cannot, and calling that a mindset failure alone is unfair. Some of these operators are competing against balance sheets, not against better managers.

Second, predatory pricing is a real market failure, and regulators do legitimately intervene in it. My objection is not that a floor price exists. It is that a floor price is a ceiling on the damage, never a source of advantage — and an industry that treats it as strategy has confused surviving with competing. The middle always gets squeezed; the exits are up into differentiation or down into infrastructure, never sideways into protection.

The bottom line

Logistics is not a licence. It is a business — and it competes on how deep your pocket is, how many people are willing to back you, how many high-skill people you are willing to hire, and how much technology you are willing to buy before it pays back.

Every owner reading this should run the same audit on their own company. Is your advantage a moat, or a fence? Is it something you built — or something you are hoping somebody else will protect?