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Bunker Adjustment Factor (BAF)

A Bunker Adjustment Factor (BAF) is a surcharge imposed by shipping carriers to cover the cost of fuel used to power their vessels. The cost of fuel, also known as bunker fuel, is a major component of a shipping carrier's operating expenses, and can be subject to rapid and unpredictable changes. To mitigate the impact of fuel price fluctuations on their bottom line, carriers often impose a BAF, which is usually expressed as a percentage of the freight rate.