Bunker Adjustment Factor (BAF)
BAF surcharge on base freight when bunker price moves above a trigger - liner trades and contract affreightments.
BAF surcharge
119,000USD
Adjusted freight
319,000USD
BAF as % of base
59.5%
Formula, assumptions, and limits
$$\text{BAF} = \max(0, P_\text{current} - P_\text{trigger}) \cdot F$$
CP-specific formula - can also be symmetric (credit for price below trigger). Liner trades often publish quarterly BAF based on a published index (CNBFF, ANERA BAF). Long-term COA contracts increasingly use floor-cap bands.
Symbol legend
| Symbol | Meaning | Unit | Source |
|---|---|---|---|
| $P_\text{current}, P_\text{trigger}$ | Current and trigger bunker prices | USD/t | CP / invoice |
| $F$ | Voyage fuel consumption | t | BDN |
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