Bunker Adjustment Factor - Definition
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What is a Bunker Adjustment Factor (BAF)?
The Bunker Adjustment Factor (BAF) refers to a high-cost expense, payment, or surcharge to individuals shipping on ocean vessels. This is an additional charge to the base rate of ocean freight that reflects the costs of fuel - otherwise known as bunker oil.
Bunker oil is the most critical cost of shipping on ocean vessels. In some cases, carriers incur more bunker cost than that base freight rate. The increased costs resulting from fluctuation of the price of bunker fuel for vessels gave rise to the development of Bunker Adjustment Factor.
Academic Research on Bunker Adjustment Factor
- An analysis of bunker adjustment factors and freight rates in the Europe/Far East market (20002004), Cariou, P., & Wolff, F. C. (2006). An analysis of bunker adjustment factors and freight rates in the Europe/Far East market (20002004). Maritime Economics & Logistics, 8(2), 187-201.
- Risk management methods for the liner shipping industry: the case of the Bunker Adjustment Factor, Menachof, D. A., & Dicer, G. N. (2001). Maritime Policy & Management, 28(2), 141-155.
- The rationale behind and effects of Bunker Adjustment Factors, Wang, D. H., Chen, C. C., & Lai, C. S. (2011). Journal of Transport Geography, 19(4), 467-474.
- Container freight rates and the role of surcharges, Slack, B., & Gouvernal, E. (2011). Journal of Transport Geography, 19(6), 1482-1489.
- Slow steaming in container liner shipping: is there any impact on fuel surcharge practices?, Notteboom, T., & Cariou, P. (2013). The International Journal of Logistics Management, 24(1), 73-86
- Bunker costs in container liner shipping: are slow steaming practices reflected in maritime fuel surcharges, Cariou, P., & Notteboom, T. (2011). Current issues in shipping, ports and logistics, 69-82.
- The organizational and geographical ramifications of the 2008-09 financial crisis on the maritime shipping and port industries, Notteboom, T., Rodrigue, J. P., & De Monie, G. (2010). Integrating Seaports and Trade Corridors, 31-46.
- Determinants of European freight rates: The role of market power and trade imbalance, De Oliveira, G. F. (2014). Transportation Research Part E: Logistics and Transportation Review, 62, 23-33.
- Risk management methods for the liner shipping industry: the response to customer service demands for simplified tariffs, Menachof, D. (1996). Journal of Business Logistics, 17(1), 259.
- Forecasting bunker prices; A nonstationary, multivariate methodology, Stefanakos, C. N., & Schinas, O. (2014). Transportation Research Part C: Emerging Technologies, 38, 177-194.