Bunker Adjustment Factor (BAF)

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Bunker Adjustment Factor (BAF)

A Bunker Adjustment Factor (BAF) is a fuel surcharge that ocean carriers add on top of the base freight rate. It exists to absorb swings in bunker fuel prices — the heavy residual fuel a container ship burns — so the carrier does not have to re-quote the base rate every time oil moves.

BAF sits beside the base rate, not inside it. A carrier quote is typically read as base freight + BAF + other surcharges, and the BAF component is revised on a schedule — quarterly in most contracts, sometimes monthly on spot lanes. It is one of several floating surcharges alongside PSS (peak season), CAF (currency adjustment) and GRI (general rate increase).

How it is calculated varies by carrier. Some use a published formula tied to a fuel-price index; others pass through the actual fuel cost of a trade lane. For LCL the charge is quoted per CBM or per revenue ton; for FCL it is quoted per TEU or FEU. Either way, BAF is not a fixed fee — it is the line item that moves when fuel moves, and on long-haul lanes it can swing 15%–25% of the all-in ocean rate.

For shippers the takeaway is simple: a freight quote without the BAF broken out is not the full rate. Lock the BAF in writing when you fix a booking, and revisit it on its revision date — otherwise a fuel rally can quietly add hundreds of dollars per container between quote and sailing.

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