SeaIntel analyzed the development of currency adjustment factors (CAF) on the Asia-Europe trade and came to two main conclusions.
First, the CAF charged varies significantly across carriers, with the difference increasing drastically over the past three years.
“We are now at a point where CMA CGM charges the lowest CAF at 8.06 percent, and MOL charges the highest CAF at 16.87 percent,” SeaIntel said in its latest Sunday Spotlight report. “In other words, some carriers charge twice as much in CAF as others.”
SeaIntel’s second conclusion was that recent redefinitions of bunker surcharges (or BAF) by a few carriers have resulted in a de-facto increase in CAF.
“The CAF is calculated as a percentage of the base rate and certain surcharges, but not as part of BAF,” SeaIntel said. “If a carrier lowers BAF through a new formula, and increases the base rate correspondingly, then this would appear to be neutral towards the customers. However, CAF is now calculated as a percentage of the increased base rate – and therefore CAF charges are increased.”
SeaIntel said it is not possible to know the carriers’ exact success rate in charging CAF, but it estimates the added annual revenue to the carriers at around $100 million.
