Maersk Line, the world's largest container carrier, is introducing a new way to calculate a floating Bunker Adjustment Factor (BAF) - and you can do it yourself on the internet.
Maersk announced that the BAF formula will be "simple, fair and transparent" and will allow the shipping company to recover expenses that account almost half of the cost of running ships, up from the 20 per cent it represented 10 years ago.
"With this web tool," said a Maersk statement, "our customers can calculate their BAF based on trade and make simulations based on fluctuations in bunker prices. In addition, the BAF Calculator has information on the variables behind our BAF formula, an extensive Q&A, and news on upcoming BAF changes."
"With Maersk Line's BAF formula we will create more transparency, and our customers will experience a simple and fair way of applying BAF," said Vincent Clerc, Maersk's vice president for Pacific services.
Fuel has tripled in three years, said the shipping line. "Naturally, this poses a significant exposure to Maersk Line and traditionally we have tried to recover this via rate increases," he said.
"Our aim with the new formula is to provide a simple, fair, and transparent BAF for our customers. In addition, allowing us to share and recover the extraordinary costs provided by the increasing bunker prices," said a Maersk statement.
"Today, we only recover approximately 55 per cent of the bunker expenses via BAF surcharges," Mr Clerc said.
"We have built the BAF formula on principles that are common in other transportation industries like airlines and parcel services. In these industries, prices and rates reflect fluctuations in fuel prices, and customers accept this as part of doing business in an industry, which is very reliant on fuel," he said.
The formula 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 benefit from downward trends as the bunker price fluctuates," he said.
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