PETALING JAYA: As Malaysia’s e-commerce sector continues to expand at double-digit rates, mounting pressure on urban roads and rising carbon emissions have exposed fundamental weaknesses in the country’s last-mile delivery model.

Diolko, a logistics startup leveraging existing rail infrastructure for parcel movement, believes the answer lies not in adding more delivery vehicles to already congested roads but in rethinking how goods move through cities.

Its co-founder and chief operating officer, Onno Pfeiffer, said the traditional response by the logistics industry has been to deploy more vans and motorcycles, a solution he described as unsustainable given the limits of urban infrastructure.

“E-commerce keeps growing, mobile penetration is extremely high and people are shopping online more than ever,” Pfeiffer told SunBiz in an interview.

“But the city infrastructure is not designed for this kind of exponential growth. Adding more vehicles simply makes congestion worse,” he said.

Instead, Diolko turned to public transport – specifically rail – as the backbone of its delivery network.

Kuala Lumpur’s extensive light rail and mass rapid transit system, Pfeiffer said, presents an underutilised asset for moving goods efficiently across the city.

“Every few minutes, there is a train moving in both directions across the city. We are not adding new trains. We are using infrastructure that already exists and optimising it in a smarter way.”

According to Pfeiffer, rail transport is significantly more efficient on a per-kilogram basis compared to road-based logistics.

By consolidating parcels from multiple customers and transporting them together via train, Diolko is able to reduce both delivery time and emissions.

“The more congested a city becomes, the more time delivery vehicles spend stuck in traffic. Trains don’t face that issue. Just by using rail, the carbon efficiency is already much higher.”

Rail transport also allows Diolko to redistribute parcels closer to end consumers, enabling electric vans and motorcycles to complete deliveries within smaller zones.

This, Pfeiffer said, addresses range limitations associated with electric vehicles while ensuring full end-to-end service from warehouse to doorstep.

While rail networks do not fully connect all intracity and intercity routes, Pfeiffer said, Diolko’s model remains flexible. For longer distances, the company can tap into KTM rail services or deploy consolidated e-truck shipments where rail is not feasible.

“What we are effectively doing is grouping volumes together. Transporting one consolidated load is far more efficient than sending 10 separate trucks.”

Pfeiffer said Diolko’s operations rely heavily on close collaboration with public transport operators, particularly Prasarana, as well as support from the Ministry of Transport.

He also said Diolko worked closely with operators to design specialised trolleys and standard operating procedures to ensure safety at stations and onboard trains.

“We had to convince them that this could be done safely. Everything – from processes to equipment – was designed with the operator and the commuter in mind.”

During a recent presentation, Diolko claimed its model could reduce carbon emissions by between 50% and 80% compared to conventional delivery methods.

Pfeiffer said these figures are measured using internationally recognised standards, including the Greenhouse Gas Protocol and the Global Logistics Emissions Council framework. “Our system tracks carbon emissions on an individual parcel basis. We know exactly how each package is transported and how much carbon is emitted at every stage of the journey.”

He added that carbon reporting is becoming increasingly important for businesses, particularly multinational companies required to disclose supply chain emissions.

“In Malaysia, there is no carbon tax yet, but reporting requirements are increasing and voluntary carbon markets are emerging. For brands, reducing emissions is not just about compliance – it’s also about differentiation, especially with younger consumers who care deeply about sustainability.”

With plans to expand operations across the Kelana Jaya and the Sri Petaling lines and reach up to 15 stations by 2027, Pfeiffer acknowledged that scaling rail-based logistics comes with operational challenges, particularly at older stations not designed for freight handling.

“Every station is different. But we assess each one and adapt our operations accordingly.”

Pfeiffer believes Diolko’s model could be replicated across Southeast Asian cities facing similar congestion and sustainability pressures. “The infrastructure is already there. The challenge is learning how to use it differently.”

 The Sun Malaysia