Bunker Adjustment Factor (BAF)
The Bunker Adjustment Factor (BAF) is a surcharge added to ocean freight to reflect changes in the cost of ships' fuel (bunkers). Because fuel is one of a carrier's largest and most volatile costs, the BAF lets carriers pass fuel-price movements through to shippers separately from the base freight rate, which stays more stable.
BAF is typically calculated per container and per trade lane, adjusted periodically as fuel prices and consumption change, and updated further when regulations shift the fuel used — for example the IMO 2020 sulphur cap, which pushed ships to more expensive low-sulphur fuel and prompted revised bunker formulas. Alongside the Currency Adjustment Factor (CAF), BAF is one of the standard adjustment surcharges that sit on top of the quoted freight and must be included when costing a shipment.
Fuel prices swing wildly, and carriers protect their margins by billing the movement separately as BAF rather than baking it into an unstable base rate. For shippers, that means the headline freight rate is never the whole cost — BAF (and CAF) must be added to know what a shipment really costs and to compare carriers fairly.
Why do carriers charge BAF separately?
Fuel is a large, volatile cost; billing it as a separate adjustable surcharge keeps the base freight rate stable while passing fuel-price changes through.
How did IMO 2020 affect BAF?
The sulphur cap forced ships onto costlier low-sulphur fuel, so carriers revised their bunker formulas and BAF levels upward.