KLANG, May 15: Players in the global oil supply industry have welcomed Malaysia’s proposal for a regional oil stockpile and sharing mechanism to ensure regional energy security. The private sector is expected to be involved in the initiative.
“It is a good move and this is exactly what many of us in the industry have been saying for years,” said the Chief Executive Officer of Maritime Network Sdn Bhd, Datuk Jeyenderan Ramasamy. ASEAN countries cannot keep operating in silo.
“Energy security covers many areas from supply chains, stockpiles, vessel movements, declarations, port coordination, banking compliance and all these are connected. Hence it will be important to ensure that existing regulations for all parties involved from port authorities and operators to shipping agents and forwarding agents are strictly enforced.
“The moment there is confusion such as mismatched documents at any point of the processing of cargo movements, or delay, selective enforcement or poor communication between authorities and operators, the entire ecosystem suffers. Investors lose confidence, cargo gets delayed and costs go up.
“The government and regulators must be even more transparent and aligned with industry players especially in difficult global conditions such as wars, sanctions, tarriffs and market instability.”
Hence proper documentation for the cargoes prior to their arrival at a Malaysian port to their storage and final discharge will be crucial, he said. “Accurate declarations involving cargoes at each point will ensure that there are no discrepancies between the records and actual status or the quality of the cargo between the time of its arrival to its discharge. This will ensure smooth operations as well as prevent any leakages in terms of tax revenues for the country,” he said in a recent interview with Weekly Echo.
The following is the full text of the Question and Answer session with Jeyenderan, who carries with him more than 30 years of industry experience.
- What are the main risks you face as a shipping agent when handling important cargo documents like the Bill of Lading?
People outside the industry sometimes think the Bill of Lading is just a normal shipping document, but in reality it is much bigger than that. The BL affects banking, insurance, Customs declarations, ownership representation, and even sanctions exposure. So the biggest risk for a shipping agent is when the physical cargo movement and the documentation stop aligning. Once there is a gap between what is on paper and what is happening operationally, everybody in the chain becomes exposed, including the shipping agent.
- Can shipping agents be held responsible if the information in the Bill of Lading or customer details turns out to be wrong?
Yes, operationally there is still exposure. Even if the shipping agent is not the cargo owner or beneficial party, the agent still acts based on the instructions and documents flowing through the system. Authorities, terminals, and counterparties rely on those movements and declarations. That is why agents today have to be much more careful with documentation integrity and KYC processes than before.
- How difficult is it when you receive different instructions from different parties that do not match the Bill of Lading?
That is where things become very dangerous operationally. In complex oil trades, you may receive instructions from traders, receivers, terminals, forwarding agents, or logistics parties that do not fully align with the original Bill of Lading. The moment different parties start operating from different versions of the cargo story, the risk level immediately increases because the agent still has to ensure consistency from a regulatory and operational standpoint.
- What problems happen when oil is mixed or stored after discharge, making it different from what is written in the Bill of Lading?
Commingling or blending itself is not necessarily unusual in the industry. The real issue is traceability. Once cargo enters shore tanks and interacts with existing inventory or undergoes further handling, the question becomes whether the documentation still accurately reflects the actual condition of the cargo. If the cargo changes operationally, then the documentation and classification process must also keep up with that change.
- What problems happen when the Bill of Lading, Customs records, and actual cargo measurements do not match, and how can this be improved?
When Customs records, Bills of Lading, tank measurements, and physical cargo positions stop aligning, the system starts losing visibility. And once visibility is lost, that is where regulatory exposure, commercial disputes, compliance gaps, and potential revenue leakage can start appearing. The solution is stronger traceability, better coordination between stakeholders, and more consistent reconciliation between operational handling and documentary treatment.
- Please cite some samples of processes that are often overlooked or treated casually, resulting in a loss of customs revenue for the country.
One area that deserves closer attention globally is post-discharge cargo handling. Once cargo enters storage systems involving multiple tank movements, transfers, or blending operations, the classification and documentation process becomes much more sensitive. If the physical cargo changes but the documentary treatment does not evolve together with it, then there is a possibility that the proper tax or regulatory mechanism may not be triggered correctly. That is where authorities and industry players need stronger alignment.
- Are shipping agents fully protected by the law if problems happen after the cargo has already left the ship?
Not entirely. Even where contractual responsibility may shift after discharge, the operational exposure can still remain because the agent’s filings, instructions, and operational involvement are still connected to the cargo movement chain. That is why shipping agents today are becoming much more cautious about documentation, traceability, and regulatory clarification.
- How hard is it to check who really owns or controls the companies involved in the cargo (KYC checks)?
KYC has become one of the biggest challenges in global shipping and commodity trading. Many structures today involve multiple jurisdictions, intermediary companies, nominee arrangements, and constantly changing trading relationships. Sometimes the physical cargo is straightforward, but the ownership and control structures behind the movement can be layered across several borders, which makes proper verification much more difficult than people realise.
–WE