Monday, September 22, 2008

Illogical BAF (bunker adjustment factors)

Update Dec. 12 - Why are there still bunker surcharges?

When I was looking at the Maersk web-site I noticed they are implementing a new BAF (bunker adjustment factor) calculator, as they call it. This type of surcharge use to be called a bunker surcharge, but as the acronym for that is BS, I guess they had to change it.

Not all the trades are implemented. This is one I picked out because it's lop-sided, much more than the others. Most of them were pretty close for each direction of the trade, but not this one.

North & Latin America to East Africa

USD 600 per 20’ container
USD1200 per 40’ container

East Africa to North and Latin America

USD 200 per 20’ container
USD 400 per 40’ container

Here is an example they give for calculating the bunker surcharge.


Bunker consumption: 0.047 mt/TEU/day Bunker Consumption - the amount of metric tons of bunker fuel needed to transport a 20' container each day of the transit.
Transit Time: 24 days Transit Time - the average number of days of a round trip voyage, divided by two, equals the one way transit time.
Imbalance factor: 0.50 Imbalance factor – is the ratio of headhaul to backhaul. This measures the inequality between imports and exports in each trade.
Bunker price change: 527 (Price) - 195 (Bunker base element) = 332 USD Bunker Price Change - the change in bunker cost, up or down, during the measurement period. The price change is the new price less the original price, (the base bunker cost is included in the base ocean freight rate).
Future bunker price: 682 USD Future bunker price - the change in bunker cost, up or down, during the measurement period. The price change is the new price less the original price, (the base bunker cost is included in the base ocean freight rate).
What are the monitoring ports


I have a friend who is a mathematician. I'll ask him to explain it to me.

Ok, well that's not really fair. I do understand it. I just don't know if like the way they are applying it. But then again it goes back to whatever the cargo can bear.

Oh, sorry, I gave away the secret to ocean rate pricing.

1 comment:

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