The Bunker Adjustment Factor (BAF) refers to a high-cost expense, payment, or surcharge to individuals shipping on ocean vessels. This is a compensation fee for the shipping vessel’s fuel cost, which can sometimes fluctuate and get adjusted last minute without prior notice. Sound confusing? Thus, surcharges may be similar across all carriers, but they are all ultimately decided internally by each carrier. You can also contact us through intercom or email us at info@bluextrade.com. The BAF means Bunker Adjustment Factor. Most large ocean vessels are powered by varying types of marine fuels and oils. Everyone is using their favourite term to refer to the same thing, so don’t get confused there. Calculation of the bunker charge will often include consideration of several different variables. Bunker adjustment factor, bunker surcharges, or simply BAF, are extra charges enacted by carriers on their rates to counteract increases in fuel prices. Updated on 18 Sep 2018 11:33 GMT: Maersk Line has announced that, from January 2019, it will be implementing a new Bunker Adjustment Factor (BAF) in a move designed to help clients to predict, plan and track how changes in fuel price will impact shipping freight rates with the implementation of the 0.5 percent global cap on fuel sulphur content in 2020. Also referred to as bunker surcharge, it is tied to the price of Brent crude oil, a major benchmark for worldwide oil prices. What is Bunker Adjustment Factor? BAF charges used to be determined by Carrier Conferences to be applicable for a certain period on a certain trade route. It was imposed to make up for the extra charges incurred during the shipment of goods. Bunker Adjustment Factor or BAF is an additional surcharge levied on the ship operators to compensate for the fluctuations in the fuel prices. BS Bunker Adjustment Factor. These charges are determined by Carrier Conferences and are applicable for a certain period and for certain trade routes. The Bunker Adjustment Factor (BAF) is an additional charge levied on the shippers to compensate for fluctuations in the price of the ship’s fuel. Bunker Adjustment Factor Surcharge Description: BAF is based on TEU, to smooth out the effect of oil price fluctuations on carrier costs. In today’s fast-changing world, we’re helping companies and industries evolve and grow with our insights and industry expertise in the world of ocean freight. More specifically, the BAF is a surcharge put on shippers with cargo aboard a vessel to keep an ocean carrier’s oil expenses in check. In addition, the amount of space that the goods take up in the bunker mean that other goods cannot be transported within that same space. Oil prices fluctuate rapidly for a number of reasons everything from the weather to politics can influence the price of oil. This additional charge reflects the costs of fuel otherwise known as bunker oil. The Bunker Adjustment Factor (BAF) is an additional charge levied on the shippers to compensate for fluctuations in the price of the ship’s fuel. An increase in a shipping rate as the result of increased oil prices.Because higher oil prices add to expenses, a shipper may set a bunker adjustment factor so as not to reduce profits.Each shipping company sets its own bunker adjustment factor; regulators monitor BAFs so … Currency Adjustment Factor - CAF: A type of charge applied on top of freight costs by carriers servicing trade between the United States and Pacific Rim … We received your message, and our team will reply to you as soon as possible. BAF(Bunker Adjustment Factor) :BAF will be calculated as per above formula and will be charged separately from the ocean freight. Bunker adjustment factor, bunker surcharges, or simply BAF, are extra charges enacted by carriers on their rates to counteract increases in fuel prices. This is an additional charge to the base rate of ocean freight. Before that carriers were able to offer long term service contracts with all inclusive rates to their customers. BAF surcharges are generally issued each month or every quarter. Booking Cancellation/No-Show Fees Return As Covid-19 Bleeds Shipping Lines, Get Instant Freight Quotes Online with Cogoport’s Discover Rates Tool. BAF is the abbreviation for Bunker Adjustment Factor.The term "Bunker" refers to the Fuel that is used to operate ships.The ship operator is responsible for the payment of these bunkers to the bunker supplier. Bunker adjustment factor, bunker surcharge or BAF refers to floating part of sea freight charges which represents additions due to oil prices. Because higher oil prices add to expenses, a shipper may set a bunker adjustment factor so as not to reduce profits. We will be in touch once we launch. Bunker Adjustment Factor BAF (Bunker Adjustment Factor): This is also sometimes referred to as FAF, or Fuel Adjustment Factor. When oil prices increase, carriers need to evaluate and calculate extra costs (BAF) to offset any significant fluctuations in their operational costs as a result of fuel price increases. This particular aspect of the rationale for the bunker charge is known as a fuel adjustment factor. What is Bunker, Bunkering and Bunker Adjustment Factor (BAF)..? Bunker adjustment factor, bunker surcharge or BAF refers to floating part of sea freight charges which represents additions due to oil prices. BS Bunker Adjustment Factor. This particular aspect of the rationale for the bunker charge is known as a fuel adjustment factor. Search. Changing Shipping with an Open Freight Marketplace. New Bunker Adjustment Factor (BAF) Dear customer, From 1st January 2020, a new regulation will come into force to reduce air pollution from ships globally. Bunker adjustment factor (baf) - BAF refers to floating part of sea freight charges which represents additions due to oil prices. New Bunker Adjustment Factor (BAF) Dear Customer, From 1st January 2020, a new regulation will come into force to reduce air pollution from ships globally. What is the difference between Bunker Adjustment Factor and Emergency Bunker Surcharge? We are proud to list acronym of BAF in the largest database of abbreviations and acronyms. ... an accurate and fair fuel reimbursement mechanism that adjusts to market realities and fluctuates with changes in bunker … The shipping lines now set their own independent BAF rates. BAF = Bunker Adjustment Factor Looking for general definition of BAF? When oil prices go up, BAF goes up and when oil prices come down, BAF also comes down.. To allow customers and Maersk to manage the volatility and cost exposure in a fair manner, the Maersk Environmental Fuel Fee (EFF) and the Quarterly Bunker Adjustment Factor (BAF) levels are subject to a monthly review and exceptional trigger if the price of compliant fuel (VLSFO - 0,5% sulphur fuel oil) moves up or down significantly during the quarter. This additional charge reflects the costs of fuel otherwise known as bunker oil. The charges are set quarterly by the Transpacific Stabilisation Agreement (TSA), and priced using the Brent crude oil benchmark. please make sure to register to gain full access to the ShipperX Solution when our Rate Management System goes live. When quoting shipping rates, carriers will add in this surcharge to the base freight. Whereas today ships can use fuel with up to 3.5% sulphur content (outside Emission … © 2020 Cogo Freight Pvt. As previously stated, you’ll not be able to negotiate these types of rate adjustments. Whereas today ships can use fuel with up to 3.5% sulphur content (outside Emission Control Areas), the new global sulphur cap will be 0.5%. Bunker Adjustment Factor BAF (Bunker Adjustment Factor): This is also sometimes referred to as FAF, or Fuel Adjustment Factor. Shippers may be wishing for lower rates but this probably isn’t the best solution for ocean freight. What is BUNKER ADJUSTMENT FACTOR (BAF)?. The Bunker Adjustment Factor (BAF) refers to a high-cost expense, payment, or surcharge to individuals shipping on ocean vessels. The European Commission banned Carrier Conferences as of October 17, 2008. For example, starting 1st January 2020, Maersk will calculate BAF based on the fuel price for 0.1% low-sulfur fuel (with a fixed deduction of 50 USD per ton). Bunker Adjustment Factor An increase in a shipping rate as the result of increased oil prices. Bunker Adjustment Factor is a surcharge levied on the shipping companies to compensate for the fluctuation in the price of ship’s fuel. Whereas today ships can use fuel with up to 3.5% sulphur content (outside Emission Control Areas), the As fuel prices are quite volatile, the shipping lines charge a fee called "Bunker Adjustment Factor (BAF)" to cover the fluctuations in global bunker costs. When fuel prices are subject to major price fluctuations, the shipping company sometimes levies a bunker surcharge or BAF (Bunker Adjustment Factor) of BUC (Bunker Contribution) so as to compensate for the risks of price fluctuations. Q: A: What is shorthand of Bunker Adjustment Factor? When looking at your bill of lading for shipping, you may see an assessorial charge called BAF which stands for Bunker Adjustment Factor or a BSC which is Bunker Surcharge. Ltd. All rights reserved. These charges are determined by Carrier Conferences and are applicable for a certain period and for certain trade routes. What is BUNKER ADJUSTMENT FACTOR (BAF)? With these fluctuations carriers were no longer able to offer stable freight rates to their customers, and they had to reflect the increases in a format named Bunker Adjustment Factor, also known as “BAF”. Bunker Adjustment Factor can be abbreviated as BAF Other shorthands for Bunker Adjustment Factor are: baf Most popular questions people look for before coming to this page You can also look at abbreviations and acronyms with word BAF in term. Everyone is using their favourite term to refer to the same thing, so don’t get confused there. An additional charge added to the base rate ocean freight cost reflecting the cost of fuel (called bunkers) to be used for the voyage. Bunker Adjustment Factor (BAF) & Environmental Fuel Fee (EFF) trigger 21 January 2020 As Maersk has communicated during the course of 2019, the switch of marine fuel to comply with the IMO Low Sulphur Cap regulation effective 1 January 2020, … The term "Bunker" refers to the fuel that is used to operate ships. Low sulphur surcharges originate from an International Maritime Organization (IMO) initiative to reduce the amount of sulfuric fuel emissions burned by ocean vessels. This video is unavailable. Skip navigation Sign in. BAF stands for Bunker Adjustment Factor (also Biological Aerated Filters and 243 more) September 9, 2019. More specifically, the BAF is a surcharge put on shippers with cargo aboard a vessel to keep an ocean carrier’s oil expenses in check. However, if you’ve made a booking and have yet to gate in your shipment, your ocean freight rate will be subject to these surcharges. 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