Circular Economy and Sustainable Packaging in the Malaysian Courier Service Industry: Transforming Supply Chains for a Greener Future

2.1 Circular economy in the service industry

The CE concept is the one that has been historically linked to manufacturing and resource-intensive industries [8], yet gained a lot of popularity in academics and policy circles when it comes to services and their application. The concept of CE has its own opportunities and challenges in the service economy characterized by the creation of intangible value, contact with clients, and proposing services based on experience. In contrast to the traditional models that focus on linear delivery of service and throughput of resources, circular service models focus on the maintenance of value through duration, efficiency of resources, reuse, and use of digital platforms to circulate resources and thereby support circular flows. Through the connection with the consumer, the service industry has a great opportunity to impact behavior, waste generation, and sustainable consumption habits and, therefore, catalyze the shift toward a regenerative economic system.

Moreover, digitalization is leading in terms of facilitating circularity in service sector [9]. The Internet of Things (IoT), blockchain, and artificial intelligence (AI) are one of the technologies that can be used to trace the movement of materials, optimize the delivery roads, observe the use of products and enable the return or reuse of assets. These technologies allow moving away to the ownership-based models and towards service performance-based offerings, which are at the core of the thinking of the CE. Such innovations are able to aid reusable delivery systems, subscription based delivery, and customer platforms that reward sustainable behavior, in the courier business. What is more, the incorporation of CE principles into the service sector promotes other sustainability initiatives, such as carbon neutrality, zero waste, green employment (green jobs and skills), and the inclusion of diverse staff to establish effective employment.

The CE has gained traction across industries, including logistics and courier services, due to its potential to minimize waste, optimize resource use, and reduce environmental impact [7]. The traditional linear economy model, which focuses on resource extraction, production, consumption, and disposal, has led to significant environmental degradation. In contrast, CE promotes a closed-loop system in which resources are reused, refurbished, and recycled, keeping materials in use for as long as possible [10, 11].

In logistics, applying CE principles involves optimizing packaging materials, improving waste management, and creating systems that enable packaging reuse or recycling (Table 1) [12]. This model has been shown to reduce costs, improve supply chain efficiency, and enhance business resilience. CE in the service industry, particularly logistics, also helps reduce carbon emissions by minimizing waste and ensuring materials are repurposed rather than discarded.

Table 1. Comparison of linear vs. circular economy (CE) models in logistics

Source: Adapted from Bocken et al. [10] and Ghisellini et al. [11].

2.2 Sustainable packaging practices

Sustainable packaging is defined as the concept and application of packaging systems that cause minimal impact on the environment in their entire life and ecological drudgery [13]. They build resource efficiency, material circularity, and life cycle assessment (LCA) thinking, to minimize the use of virgin resources, to reduce carbon emissions and enhance end-of-life recoverability. When it comes to the courier service industry, where packaging is important in terms of a protection of goods, the branding of goods and delivery [14], the sustainable practices of packaging are rather regarded as a management strategy instead of an environmental issue. Developing consumer awareness, the regulatory factor, and the worldwide transition toward the concepts of the circular economies are the drivers of this shift.

The other important aspect of sustainable practices is the aspect of social and ethical considerations that are to be included in sustainable packaging practices. The environmental performance of this selection of materials must be relevant, along with the attributes of labor practices, the transparency of the sourcing, and community impacts. As an example, sourcing packaging materials in the local area helps the regional economy and cuts emissions in the supply chain, whereas inclusive design can make the product more usable and the end-user can follow the instructions to sort the ends of the labels. Courier firms are also starting to see the value in mobilizing consumers around the sustainability agenda by putting on-the-package messages, eco-labels, and checkout options to order green delivery services.

In addition, data and analytics are promoting the optimization of packaging and the reduction of waste. LCA tools allow organizations to measure and determine the environmental impact of different types of material used in packaging and packages, and that helps make those decisions (swap materials, redesign) driven by data, rather than intuitively. Parcel-size analysis and fragility of the various products can automatically suggest the most material efficient packaging that takes the least space by reducing the void space and cushioning requirements as analyzed by the software platforms [14]. These technologies are especially applicable to high-volume fulfillment centers, baggage centers, and courier facilities located in urban areas of Malaysia because competitiveness is predicated on both efficiency and control of costs.

Figure 1. Conceptual framework illustrating the determinants of sustainable packaging adoption in the Malaysian courier service industry, grounded in CE principles

The environmental impact of packaging waste is immense, particularly in countries like Malaysia, where waste management systems are often underdeveloped. Studies have shown that sustainable packaging can drastically reduce waste sent to landfills and promote a cleaner, more sustainable environment (Figure 1) [5].

Sustainable packaging is a critical component of the CE, as it directly addresses one of the largest environmental challenges in logistics, the generation of packaging waste. Sustainable packaging refers to packaging materials that are recyclable, biodegradable, or reusable, designed to reduce environmental impact. In recent years, businesses across the logistics and courier sectors have increasingly adopted sustainable packaging to reduce their carbon footprints, comply with environmental regulations, and meet consumer demand for eco-friendly products [15].

A study by Accorsi et al. [16] found that adopting sustainable packaging reduces waste management costs and provides long-term financial savings. Furthermore, sustainable packaging enhances brand reputation, as environmentally conscious consumers prefer companies that demonstrate commitment to sustainability. Sustainable packaging materials, such as biodegradable plastics, recycled cardboard, and reusable packaging, are gaining traction in logistics due to their positive impact on reducing waste.

2.3 The Malaysian courier service industry

The Malaysian courier service industry has grown rapidly, fueled by the expansion of e-commerce. This growth, however, has led to a surge in packaging waste, primarily from single-use plastics and non-recyclable materials. According to a report, over 80% of the packaging materials used by Malaysian courier companies are non-recyclable. This dependency on unsustainable packaging materials presents a significant challenge for the industry, particularly as the government and consumers increasingly push for more sustainable practices.

The adoption of sustainable packaging in Malaysia’s courier service industry has been slow, but some companies have begun implementing pilot programs to reduce packaging waste. Larger courier companies such as Pos Malaysia and GDEX have taken steps toward adopting recyclable and biodegradable packaging materials. However, smaller courier firms face significant barriers, including high initial costs, limited access to sustainable packaging options, and limited recycling infrastructure in certain regions (Table 2) [7].

Table 2. Market share of major courier companies in Malaysia (2020)

Some efforts have been made in government policy to focus on sustainability in logistics, with the National Transport Policy (2019-2030) and the Malaysia Roadmap towards single-use plastics (2018-2030) in this period beginning to address this issue, yet industry participation remains inconsistent. Some courier companies have even experimented with the use of reusable packaging, the adoption of route optimization technologies, and the consideration of biodegradable packages; however, industry-wide conversion is slowed by cost constraints, consumer appeal, and lack of industry-wide coordination. The sector is also dependent on the SMEs and independent riders, which complicates the transition even more, as smaller operators tend to have limitations when applying sustainable operations due to capital and knowledge constraints.

Environmental sustainability is a serious concern for packaging practices in the Malaysian courier industry. The tendency to apply the MPs of bubble wrap, polystyrene fillers, and multilayer laminated bags is an indication that the industry does prefer cost-effectiveness and service life beyond environmental awareness. Although such materials successfully package parcels using them in the entire supply chain, they also cause plastic waste and landfill deposits, as well as produce greenhouse gas emissions in production and discarding. What is more, most of these items cannot be recycled within the existing Malaysian waste infrastructure because of contamination, mixed materials or due to a lack of sorting infrastructure. Even though some courier companies have deployed branded recyclable boxes or even compost mailers, their use is not massive or obligatory.

2.4 Barriers to the adoption of sustainable packaging

While the potential for sustainable packaging in Malaysia’s courier service industry is significant, several barriers prevent widespread adoption. These barriers include high initial costs, lack of infrastructure, and insufficient consumer demand for eco-friendly packaging, and most courier businesses continue to use single-use materials such as polyethylene (PE) mailer bags, bubble wrap, corrugated cardboard boxes, which are cheap, lightweight, and protective. Although these materials perform effectively in terms of parcel integrity in transit, they are a source of municipal solid waste and plastic litter, especially given Malaysia's weak recycling system and poorly maintained waste segregation systems. In particular, the packaging decisions made by many small and medium-sized courier operators serving last-mile deliveries have not been subject to a formal sustainability policy (let alone an actual policy) and, thus, have been made with operational efficiency rather than environmental performance in mind.

High initial costs are often seen as a significant deterrent for SMEs. According to Zhu et al. [17], the price of sustainable packaging materials is generally higher than that of conventional packaging, which makes SMEs hesitant to invest in these solutions. Furthermore, the lack of recycling infrastructure in Malaysia, especially in rural and suburban areas, hinders the recycling or repurposing of packaging materials, a key principle of the CE (Table 3) [7].

Table 3. Ranked barriers to sustainable packaging adoption based on survey responses

Additionally, while consumers are increasingly aware of environmental issues, many remain reluctant to pay a premium for products with sustainable packaging [12, 18]. This limits demand for eco-friendly packaging, making it difficult for companies to justify switching to sustainable alternatives.

In general, adopting CE principles enables the courier service sector to harmonize environmental responsibility with business resilience, promoting a sustainable growth path that benefits both the economy and the ecosystem.

The existing scenario on both fronts indicates that the courier industry in Malaysia is undergoing gradual transformations to attain sustainability, but due to the economic, infrastructural, and behavioral limitations, the rate of progress in Malaysia is being brought down. A viable change cannot be implemented without the efforts of courier companies, government institutions, packaging suppliers, and consumers to drive the change with the help of policy comprehension, subsidies, and education. When all these efforts are coordinated, they can fast-track the shift towards green initiatives to sustainable packaging and establish Malaysia as an example of green logistics in the ASEAN market.

Quantitative analysis indicates that firm size is a statistically significant determinant of sustainable packaging adoption. Chi-square tests reveal a significant association between firm size category and adoption status (χ², p < 0.05), with medium and large firms exhibiting higher adoption rates than micro and small enterprises. Independent-sample tests further indicate that firms adopting sustainable packaging report significantly higher awareness of CE principles and regulatory expectations.

To further examine adoption determinants, a binary logistic regression model was estimated, with sustainable packaging adoption as the dependent variable. The results suggest that firm size, perceived long-term cost savings, and regulatory awareness positively influence the likelihood of adoption, whereas perceived upfront cost barriers negatively affect it. These findings are consistent with prior logistics and sustainability studies in emerging markets [9, 13].

4.1 Operational definition

In this study, sustainable packaging is operationalized as packaging systems that meet at least one of the following criteria: (i) use of recyclable or compostable materials compliant with nationally recognized standards, (ii) incorporation of recycled content, (iii) reusability through multiple delivery cycles, or (iv) demonstrable reduction in material intensity based on life-cycle assessment principles (ISO 14040 framework) (Table 4).

Table 4. Operationalisation of key constructs

4.2 Current practices in sustainable packaging

Sustainable packaging is a practice that exists in the Malaysian courier service industry, though in its early stages, but progressively coming around as a practice that is logistically conscientious. Because e-commerce is gaining momentum rapidly due to digitalization, the widespread adoption of smartphones, and new consumer behaviors, the number of parcel deliveries is increasing dramatically.

The study's findings indicate that sustainable packaging adoption in Malaysia's courier service industry is still in its nascent stages. Of the 100 surveyed companies, 40% reported using sustainable packaging materials such as biodegradable plastics, recyclable cardboard, and paper-based products. However, 60% of respondents stated that they still predominantly rely on traditional packaging materials such as plastic, Styrofoam, and other non-recyclable options. This highlights a significant gap between the growing awareness of sustainability and its actual implementation within the industry.

Larger courier companies, particularly those with over 100 employees, were more likely to adopt sustainable packaging practices. For instance, Pos Malaysia and GDEX reported ongoing initiatives to integrate recyclable and biodegradable packaging materials. These companies often have more financial resources, enabling them to experiment with eco-friendly alternatives despite the higher initial cost of sustainable packaging materials.

On the other hand, smaller firms, particularly those with fewer than 50 employees, face significant challenges in adopting these practices. Many of these companies expressed concerns about the financial viability of investing in sustainable packaging because eco-friendly materials are more expensive. These smaller firms also struggle to access suppliers of sustainable packaging solutions, exacerbating the issue. Therefore, the current adoption of sustainable packaging remains skewed towards larger, more resourceful companies, leaving SMEs with limited capacity to transition to circular economic practices.

Any action to stimulate recycling or reuse of the packaging materials is quite feeble and uncoordinated. Although there are a few collection stations for used boxes and mailers in cities, there is no centralized return or reverse logistics system to enable processing of the volumes across a broader set of recovery and remailing to the supply chain. Also, take the example of reusable packaging being heavily touted in other European markets, including tote bags and collapsible containers. There are almost none of these in the courier system in Malaysia, mainly due to logistical limitations, non–standardization, and poor buyer attention. On the same note, QR-coded or intelligent packaging that enables tracking, re-use or disposal instructions has not been properly tested on the local level.

Despite these challenges, the awareness of sustainable packaging and its importance is growing in the industry. 40% of respondents indicated that they were actively exploring options to integrate more sustainable materials into their packaging processes. This shows a positive shift towards sustainability, although the pace of adoption remains slow and is hindered by various barriers.

Figure 2 presents a bar chart comparing the percentage of companies using sustainable packaging versus those that still rely on traditional, non-recyclable materials.

Figure 2. Percentage of companies using sustainable packaging

4.3 Barriers to the adoption of sustainable packaging

The study identified several key barriers that hinder the widespread adoption of sustainable packaging practices in Malaysia’s courier service industry. These barriers are multifaceted, ranging from financial constraints to infrastructure limitations, and pose significant challenges for companies seeking to transition to more sustainable packaging solutions. Although more and more people worldwide support environmental sustainability and recognize the potential of sustainable production and the CE to reduce waste, practical efforts to implement eco-friendly packaging options in the Malaysian logistics and courier industry remain limited in many respects. These barriers are important to understand in order to devise workable tactics for a move towards greener supply chain activities.

The most cited barrier by respondents was high initial costs. According to 65% of the companies surveyed, the upfront cost of sustainable packaging materials was perceived as a significant obstacle. Eco-friendly packaging materials, such as biodegradable plastics and recyclable cardboard, tend to cost more than traditional packaging materials, which creates a financial barrier, particularly for SMEs. These higher costs often make it difficult for companies to justify the investment, especially when short-term profitability is a priority. The Malaysian courier industry is also facing intense price competition due to e-commerce, where consumers demand low-cost or even free deliveries. With this cutthroat competition, there is hardly any scope for companies to offset the extra cost of using eco-friendly packaging, so cost is one of the strongest reasons why few companies that attempt to adopt some sustainable practices end up adopting only a few.

In addition to the financial costs, the lack of infrastructure for recycling and material recovery was another major barrier identified by 53% of respondents. While larger courier companies may have the resources to manage recycling and waste processing within their operations, smaller companies often lack access to such infrastructure. The lack of accessible recycling facilities in many parts of Malaysia makes it difficult for companies to manage waste effectively, reducing the incentive to adopt sustainable packaging solutions. It is also apparent that Malaysia lacks significant domestic manufacturing capacity for biodegradable, recyclable packaging materials. Consequently, most environment friendly packaging items had to be imported most of which came in China or Thailand or other regional players. The purchase of these materials not only increases procurement expenses due to exchange rate fluctuations, delivery charges, and duties, but also generates supply chain risks related to availability and lead times. Couriers and packaging suppliers have voiced concerns about performance and scalability in sourcing green packaging materials, particularly during times of global supply chain disruption, including the COVID-19 pandemic.

Furthermore, 41% of companies reported that the lack of consumer demand for sustainable packaging was a significant challenge. Despite growing awareness about environmental issues, many consumers still prioritize cost and convenience over sustainability. As a result, businesses often feel that investing in sustainable packaging may not yield significant returns if consumer demand remains low. The need for greater consumer education and awareness was frequently highlighted as a critical step in overcoming this barrier.

Another daunting obstacle is the changing operational and logistics challenges. The changes in current logistics models are of great significance for achieving circular packaging systems through reusable containers or take-back programs. The majority of courier industries in Malaysia are based on the linear model of a send and dispose model that includes the use of packaging that only gets disposed at the end of the chain by the final recipient. A switch to the circular system would require investments in reverse logistics infrastructure, including collection, sorting, cleaning, and redistribution of reusable packaging. Not only is this a costly process, but it is also logistically difficult, especially in geographically diverse Malaysia, which comprises urban centers, suburban areas, and rural areas. Complex logistics by itself and the extra resources required to handle the logistics of retrieving the packaging material at thousands of spread-out delivery points would be beyond the priorities of many companies at the moment.

Although the country has already established the Roadmap Towards Zero Single Use Plastics 2018-2030, the strategy does not clearly outline sustainable packaging requirements in the logistics and courier industries. Lacking both legally binding and industry-specific regulations, there is no regulatory incentive compelling most courier companies to adopt green packaging solutions. Besides, no financial support, in the form of tax rebates, subsidies, or grants, is provided to cover the cost of switching to sustainable materials. Such a regulatory vacuum leaves the decision to use green packaging largely in the hands of corporate social responsibility (CSR), which, most of the time, is secondary to business interests.

Market demand and consumer behavior are other factors influencing packaging practices, and in Malaysia, this is another barrier. Although some urban regions have raised awareness of environmental conservation, the vast majority of Malaysian consumers prefer fast, cheap delivery over environmentally friendly packaging. A large share of customers is not yet ready to pay a premium for green delivery, and consumer demand for environmentally friendly practices among courier companies is not as pressing. This absence of consumer global packaging marketing for plastic packaging reduces the incentive for courier services to invest in eco-packaging. In addition, most small and medium-sized online merchants in Malaysia, which form a large segment of e-commerce enterprises in the country, are unwilling to adopt sustainable packaging due to concerns about cost-effectiveness and customer demand to protect their goods during delivery.

There are also technological constraints to adopting sustainable packaging. It is unlikely that all the current eco-friendly materials on the market can meet the needs of the courier industry in Malaysia. For example, when comparing biodegradable mailers and plastic mailers, the former can exhibit reduced product protection, water resistance, and durability, which can endanger products during high-humidity rainy seasons in Malaysia or when delivered to rural locations over long distances. The invention of highly efficient, sustainable packaging technologies that rival, and in some cases exceed, the workability efficiency of plastic packaging remains under development and might not be readily available or affordable to most industries.

Lastly, logistical challenges also contribute to the slow adoption of sustainable packaging. Many companies noted that sustainable packaging solutions are often more complex from a supply chain perspective and require closer coordination with suppliers. This can be especially difficult for SMEs, which lack the resources to enter into long-term partnerships with eco-friendly packaging suppliers.

4.4 Opportunities for improvement and transformation

While the barriers to adopting sustainable packaging are significant, the study also revealed several opportunities for improvement that could drive the widespread adoption of CE practices in Malaysia’s courier service industry. The courier and logistics industry can be instrumental in helping the country move closer to its sustainability goals for the environment by reducing packaging waste and fostering the CE. They are not just environmental necessities but also strategic options for long-term competitiveness, corporate responsibility, and alignment with global green supply chain trends. The adoption of more sustainable packaging practices in the courier industry could be boosted through technological innovation, policy support, consumer engagement, and collaboration.

One of the primary opportunities identified is the potential for government support in facilitating the transition to sustainable packaging. Several respondents suggested that the Malaysian government could play a crucial role by providing financial incentives or tax relief for companies that adopt sustainable packaging solutions. Government policies could also help to level the playing field between larger companies with more resources and smaller businesses that struggle with the higher costs of sustainable packaging. Moreover, regulations requiring companies to use a certain percentage of recyclable or biodegradable packaging could provide a strong incentive for the industry to adopt CE practices. As global environmental concerns grow, government intervention could accelerate the shift toward more sustainable practices in the courier industry.

Another key opportunity lies in industry collaboration. Several industry players expressed the need for more cooperation between logistics companies, packaging suppliers, and local governments. Such collaboration could help overcome the financial and logistical barriers that many SMEs face in adopting sustainable packaging. For example, by partnering with packaging suppliers to secure bulk discounts on eco-friendly materials, courier companies could reduce the upfront costs of switching to sustainable packaging. Additionally, industry-wide initiatives could help create shared infrastructure for recycling and material recovery, particularly in underserved areas of Malaysia.

Possibilities of further transformation are presented by advances in technology and digitalization. Smart packaging features, such as QR codes, Radio-Frequency Identification (RFID) tags, and blockchain-enabled tracking throughout the life cycle, can also help boost transparency and promote take-back or reuse initiatives. For example, platform-giant reusable packaging can track how many times it is used and returned, allow courier companies to manage returns without the burden of tracking them, and encourage customer rewards to engage in circular systems. Digital networking would also accommodate pooling systems for packaging, where the uniformity and reusability of packaging across different logistics providers are multiplied, decreasing costs and enhancing productivity. Also, green checkout, which allows customers to choose environmentally friendly packaging for their deliveries, can be introduced on e-commerce sites. Companies can also reduce packaging waste by optimizing product packaging using machine learning and AI-enabled algorithms to improve package size and fill gaps, and eliminate the need for excess fillers and overpackaging.

Consumer education emerged as another significant opportunity for encouraging the adoption of sustainable packaging [21]. The study found that 41% of respondents believed that consumer demand for eco-friendly packaging was too low to justify the investment. However, there is a growing trend of consumers becoming more environmentally conscious. By investing in consumer awareness campaigns and educating the public about the benefits of sustainable packaging, companies can foster a market more supportive of green initiatives. Such initiatives could involve partnerships with NGOs or local environmental organizations to promote sustainable packaging through awareness programs, social media campaigns, or in-store promotions.

Another important area for development is reverse logistics infrastructure [22]. Most courier services currently offer one-way delivery, with little or no ability to package returns. Nevertheless, by integrating reverse logistics into current networks, businesses can establish cyclical ratios for packaging materials, waste, and resource depletion [22]. Collection of used packaging could be simplified by implementing parcel lockers, drop-off points, or service points in a central location, or by collaborating with retail stores, to ensure returns are easier for consumers. Reverse logistics, to the extent it is developed, also works towards attainment of the sustainability targets but it has a bonus effect of providing an alternate income channel in form of recycling agreements and material recovery as well as resale of used packaging resources and materials.

Lastly, companies in the courier service industry can gain a competitive advantage by adopting sustainable packaging. Many consumers are now willing to pay a premium for eco-friendly products and services. According to White et al. [21], businesses that embrace sustainability not only improve their environmental footprint but also enhance their brand reputation. This can be a critical factor in attracting environmentally conscious customers and building long-term customer loyalty. For companies in Malaysia’s courier service industry, embracing CE principles could be a key differentiator in a highly competitive market.

In short, there are so many opportunities for the Malaysian courier service industry to enhance and change its packaging to make it more sustainable. By means of technological solutions, policy, consumer satisfaction, industry cooperation, reverse logistics, supplier cooperation, employee education, and the use of the CE, the industry can transform its existing linear system to a more responsible, environmental, and CE-friendly packaging system. Such opportunities will not only reduce environmental risks but also make the logistics business in Malaysia the forerunner in sustainable supply chain management in Southeast Asia.

4.5 Sustainability as a driver of long-term profitability

Adopting sustainable packaging not only provides environmental benefits but can also contribute to long-term profitability [23]. Several respondents noted that while the initial investment in sustainable packaging materials is higher, the long-term savings on waste disposal and packaging costs can offset the upfront expenses. By reducing waste, companies can lower their operational costs, especially in areas such as packaging material procurement and waste management. Furthermore, adopting sustainable packaging can enhance a company’s brand image, allowing it to tap into the growing market of environmentally conscious consumers. Malaysian courier industry, sustainability, especially in its packaging, gives the industry a strategic road towards assuring continued survival, not increasing the cost of its operations in the long view as well as keeping in tandem with emerging global market expectations.

Another important dimension in which sustainability can lead to profitability is the improvement of brand reputation and customer loyalty. Contemporary customers, particularly millennials and members of Generation Z, are increasingly environmentally aware and more likely to favor businesses committed to green practices. E-commerce and courier companies that also offer sustainable packaging solutions are likely to achieve higher customer retention, stronger word-of-mouth recommendations, and greater brand distinction in a highly competitive field. A strong sustainability profile will strengthen the corporation's image and make it more trustworthy, which is crucial for customer acquisition and retention. In this case, in Malaysia, where the environment is characterized by extremely high industry rivalry and low switching costs, it is a serious advantage for a firm to distinguish itself as environmentally friendly. When companies align with consumers' values, they can charge higher prices, build emotional loyalty, and grow lifetime customer value.

Another long-term profitability factor related to sustainability is operational resilience. Business continuity has increasingly been threatened by climate change, resource scarcity, and supply chain disruptions. By using eco-friendly packaging and the principles of the CE, the courier firms would limit their exposure to potentially volatile raw-materials markets, such as petroleum-based plastics, and insulate themselves against price shocks, fuel availability shortages, and geopolitical risks in fossil-based fuel supply chains. The use of recycled or locally sourced biodegradable materials will also support supply chain localization and limit global imports, thereby improving supply stability. Moreover, there are process innovations that are frequently driven by sustainable practices, in which businesses redesign processes, streamline routes, reduce greenhouse gas emissions, and operate more efficiently and nimbly, positioning them better to respond to market changes.

Sustainability also brings new sources of income and profit-making business model innovations. As another example, courier businesses can charge higher rates, while eco-friendly shoppers can choose carbon-neutral or very few-package delivery services. Businesses can create packaging-as-a-service applications, renting reusable packaging to clients, handling returns via reverse logistics, and thereby generating more revenue while decreasing waste. Partnerships in waste recovery and recycling can also generate revenue from post-consumer packaging materials, turning a cost center into a profit-making operation.

By incorporating sustainability into their core services, courier companies can position themselves in the green economy, expand into new markets, and reach new client groups focused on ethical, eco-friendly consumption. The remaining ways sustainability relates to profitability are employee engagement and staff retention. Businesses that are committed to sustainability tend to have higher staff morale, participation, and performance. One more result is the increase in the company's positive social and environmental impact, and workers want to identify with companies that make this impact, resulting in a decreased turnover rate, lower recruitment costs, and a strengthened organizational culture.

In the logistics and courier service industry in Malaysia, where competition to acquire skilled workforce is becoming stiff, a strong CSR image can act as a talent magnet, ensuring workforce stability and operations at a higher level.

Prior research suggests that eco-friendly packaging can positively influence consumer perceptions, purchase intention, and customer loyalty. As more consumers become aware of the environmental impact of their purchases, companies that integrate sustainable packaging into their supply chains are likely to attract a larger customer base. Therefore, sustainability should not be seen as a cost but as an investment in long-term profitability.