Bunker Adjustment Factor (BAF)

What Is a Bunker Adjustment Factor (BAF)?

A Bunker Adjustment Factor (BAF) is a surcharge added to ocean freight rates to account for fluctuations in the cost of bunker fuel, the fuel used to power container ships, protecting carriers from having to constantly renegotiate base freight rates every time fuel prices move.

How Does BAF Work?

Carriers calculate BAF based on prevailing bunker fuel prices, and it's typically reviewed and adjusted monthly or quarterly, though it can change more frequently during periods of high fuel price volatility. It's charged per container or per weight/volume unit, on top of the base ocean freight rate.

Why BAF Matters

BAF can be a significant and unpredictable portion of total ocean freight cost, since fuel prices are volatile and outside a shipper's control. Understanding how a carrier calculates and updates its BAF helps shippers budget more accurately and compare all-in costs (base rate plus surcharges) across carriers, rather than comparing base rates alone.