Definition
A surcharge that adjusts ocean freight for fluctuations in the price of marine fuel (bunker).
The Bunker Adjustment Factor is a floating surcharge carriers add to the base ocean rate to recover changes in bunker fuel costs. Because fuel is a large and volatile part of vessel operating expense, it is billed separately so the base rate can stay relatively stable.
BAF formulas and amounts vary by carrier and trade lane and are revised periodically. It is distinct from the CAF, which covers currency movements rather than fuel, and from low-sulphur surcharges tied to emissions rules.
Related terms
Currency Adjustment Factor (CAF)
A surcharge that adjusts freight for exchange-rate fluctuations between the billing and base currencies.
Terminal Handling Charge (THC)
A fee charged by the port terminal for handling a container between the vessel and the yard.
General Rate Increase (GRI)
A carrier-announced increase to base ocean freight rates on a trade lane, effective from a set date.
Ocean Freight
The transport of goods by sea, the dominant mode for high-volume international trade.
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