Exporters and importers can now use a new fair and transparent bunker adjustment factor (BAF) when shipping their products. Shipping company Maersk Line introduced the new formula after bunker prices tripled in the last three years. Bunker costs now comprise nearly half of the total vessel cost, up 20% from only 10 years ago.
Using principles common in other transportation industries, such as airlines and parcel services, the new BAF formula considers prices and rates that reflect fluctuations in fuel prices. Fuel consumption, transit time and imbalances of container flows are also built into the formula, but the BAF level is only subject to changes in the oil price.
This means customers only pay the variation in cost and although the BAF increases when fuel prices do, customers will also benefit from downward trends as the bunker price fluctuates.
“With Maersk Line’s BAF formula, we’ll create more transparency and our customers will experience a simple and fair way of applying BAF,” said Maersk’s vice president for Pacific Services, Vincent Clerc.
“We are seeing an increased understanding and acceptance of BAF as a floating mechanism and our customers increasingly accept that we must share the extraordinary costs in a just way.” – David Steynberg.