In the early 1920s, the economic advantages of the motor ship over the steamship became obvious to shipping lines, in particular the increased cargo capacity created by the absence of coal bunkers. The Australian shipping line Burns, Philp and Co. Ltd placed an order for such a motor ship to ply the Java-Singapore run. The ship, named the MV Malabar after a small town in Java, was launched at Glasgow, Scotland on 9 July 1925.

The wreck of MV Malabar, 2 April 1931.

The MV Malabar was 350 feet long, 48 feet 6 inches wide, with a gross tonnage of 4,512 tons. It was powered by a 2,700 horsepower eight-cylinder diesel engine, giving the Malabar a top speed of 13.2 knots. The Malabar could accommodate 156 passengers, as well as having five cargo holds, and insulated holds for fruit and frozen meat, with a total cargo capacity of 202,920 cubic feet. 602 tons of oil could also be carried.

The Malabar arrived in Sydney on 17 December 1925 on its maiden voyage from England via Colombo and Singapore. The first voyage on the Singapore run commenced 2 January 1926 from Sydney, with passengers and cargo, stopping at Brisbane, Townsville, Thursday Island, Darwin, Surabaya, Smarang, and Batavia (Jakarta).

The Malabar was involved in a couple of incidents before its ultimate demise. During trials in the Firth of Clyde (Scotland), the Malabar rammed the Wemyss Bay railway pier when the steering failed. In September 1926, the Malabar attempted to tow a stranded British steamer, Rio Claro, off Scott Reef near Cairns, but failed. In fact, the Rio Claro was stranded for 39 days before being refloated.

On 31 March 1931, under relief skipper Captain George Leslie, the Malabar left Melbourne for Singapore on her 32nd trip. At 6:45 am on 2 April 1931, the Malabar was one mile abeam of Cape Banks, with hazy weather, flat seas and a noticeable swell at high tide. The vessel's course was altered, and upon entering dense fog it ran aground on the northern side of Long Bay, 14 kilometres south of Sydney Harbour.

The Malabar's engines could not get it off the rocks, and Captain Leslie ordered the evacuation of passengers and the 108 crew. Evacuation took half an hour, and included the swimming to shore of three valuable stud horses. The ship's cat was the only life lost, as it refused to leave the Malabar.

Sydney's Easter crowds came out in force to see the wreck, with newspapers estimating that 500,000 people visited the site over the Easter weekend. Goods were salvaged from the shoreline between Sydney and Newcastle. The Malabar's crew was a mixture of Chinese cooks, Indian cleaners and engine room staff, and Malay deckhands. Police suspected some of the Chinese crew of importing opium into Australia and were awaiting the arrival of the ship on the day it wrecked. Officers rushed to Long Bay, and after following some crew members to Chinatown and searching the premises, and finding quantities of opium, a number of people were arrested, including some of the Malabar's crew.

The wreck was sold for 140 pounds for salvage to Penguin Ltd on 7 April 1931. Heavy seas prevented all of the salvage taking place, and it was not until the late 1950s and early 1960s and the introduction of scuba diving  that the remaining valuable metal items were removed. Around this time, the wreck was blown up in a further attempt at salvage, and as a result of this, and the toll of heavy seas, all that remains is rusting, twisted pieces of metal.

The wreck of the Malabar was only metres from the ocean outfall of Sydney's largest water treatment plant, and this made the wreck inaccessible to divers for many years. In 1990, with the activation of the sewage plant's deep-water ocean outfall, the wreck has again become accessible to divers.