Glossary Discription

The Bunker Adjustment Factor (BAF) is a variable surcharge applied by ocean carriers to freight rates to compensate for fluctuations in marine fuel (bunker) costs. This adjustment mechanism allows shipping lines to pass fuel price volatility onto shippers and consignees without constantly renegotiating base freight rates. BAF is calculated and applied separately from the base ocean freight rate, providing transparency in how fuel costs impact the total shipping expense. The surcharge is typically expressed as a dollar amount per container or per freight ton, varying by trade route, vessel type, and current fuel prices. Also known as Fuel Adjustment Factor (FAF) or Bunker Surcharge, BAF has become an essential component of maritime shipping cost structures, particularly following significant regulatory changes affecting fuel specifications and pricing.