Maersk takes the mystery out of BAF

THE LAUNCH by Maersk Line of a web-based bunker adjustment factor calculator is designed to provide a simple, fair and transparent tool that will enable its customers to calculate their BAF and make simulations based on fluctuations in bunker prices. In addition it will provide information on the variables behind the formula, an extensive Q&A, and news on upcoming BAF changes. In the face of constant fluctuations in the price of fuel, the BAF has become a fact of life to which most shippers have grown accustomed. “The formula enables customers to experience a simple and fair way of applying BAF,” says Vincent Clerc, vice president for Pacific Services. According to the line, bunker prices have trebled in the last three years and bunker costs now constitute nearly half of the total vessel costs, up from 20% ten years ago. The formula is based on principles that are common in other transportation industries like airlines and parcel services and builds on elements such as fuel consumption, transit time, and imbalances of container flows. “However, only changes in the oil price will entail changes in the BAF level. Our customers will therefore only pay the variation in cost, and although the BAF rises when fuel prices climb, they will also benefit from downward trends as the bunker price fluctuates,” he said. The line’s various trades will implement the new formula separately, beginning in the first quarter of 2008. The rollout is expected to be completed by January 1, 2009.