BAF (Bunker Adjustment Factor)

The Bunker Adjustment Factor (BAF) is an additional charge levied by shipping companies on cargo owners in international ocean freight to address fluctuations in fuel oil prices, typically applied on top of the base ocean freight rate. Its use cases include: when the market price of fuel oil rises above the shipping company's preset benchmark, the shipping company will proactively impose a BAF; conversely, when fuel prices fall, a negative BAF (i.e., a refund) may also occur. Points to note: BAF is usually charged as a fixed amount per revenue ton (e.g., per 20-foot container or per cubic meter), and standards vary across different routes and different shipping companies; when booking space, cargo owners need to confirm whether BAF is already included in the quotation to avoid subsequent disputes. Differences from related terms: BAF is different from EBS (Emergency Bunker Surcharge, which is levied temporarily only when fuel prices fluctuate sharply) and FAF (Fuel Adjustment Factor, commonly used in air freight or some near-sea routes); BAF is more routine and adjusted periodically. In addition, BAF, together with THC (Terminal Handling Charge), CAF (Currency Adjustment Factor), and others, collectively constitutes the ocean freight surcharge system, and when quoting in foreign trade, the party responsible for each surcharge should be clearly specified.