Currency Adjustment Factor - Explained
What is the Currency Adjustment Factor?
Written by J. Mance Gordon
Updated at April 21st, 2024
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What is the Currency Adjustment Factor (CAF)?
The currency adjustment factor (CAF) refers to a surcharge that is placed on freight charges and transactions between the United States and the Pacific Rim. The surcharge is an additional fee placed on freight costs was developed to give account for vulnerability in the currency exchange rate between these countries.
CAF was developed to ensure that carriers do not bear the disadvantages of exchange rates in freight costs all alone. Ultimately, the exchange rate risk is transferred to the consumers through CAF.