CAF (Currency Adjustment Factor)

Currency Adjustment Factor (CAF) is a surcharge imposed by carriers in international freight transport to compensate for the depreciation of the settlement currency, typically calculated as a percentage of the base freight rate. Usage scenarios: When freight is denominated in a foreign currency such as USD, while the carrier's actual operating costs are paid in local or other currencies, if the denominated currency depreciates, the carrier's revenue effectively shrinks, and CAF is used to offset exchange rate losses. Commonly seen in sea, air, and some land transport. Notes: CAF is not a fixed rate and adjusts with exchange rate fluctuations; standards vary by shipping company, route, and period, and must be confirmed before booking; CAF typically does not participate in freight discounts and may be adjusted monthly. Difference from Bunker Adjustment Factor (BAF): BAF is set due to fuel price fluctuations, while CAF is set due to exchange rate fluctuations; both often exist simultaneously but have different triggers. Difference from Peak Season Surcharge (PSS): PSS is set due to tight capacity, while CAF is set due to currency depreciation. Foreign trade practitioners should specify in contracts the party bearing CAF and the adjustment mechanism to avoid disputes.