X You are participating in the import and export of goods by sea, so you need to learn about what is the baf surcharges, what is the abbreviation of the word?
x You want to know what role baf has, what is the collection for, which party is responsible for paying this fee in shipping?
x You wonder what formula baf cost in the import and export is calculated?
What is the baf, what is the regulation, how important it is, ... will be Proship.vn within this article. At the same time, over here, the parties will also know that in addition to the baf fee, there will be some other surcharges in the process of exporting and importing goods in general.
What is baf fee? Who regulates, which party pays? Origin was born?
Join Proship to find out what is the baf surcharges, the abbreviation of the word, the origin of the birth, who the regulation and which party must pay the following fee:
What is the baf fee?
What is the bafe? BAF (or Bunker Adjustment Factor) is an additional fee on the sea charges, which is imposed to adjust the cost due to fuel price fluctuations. This is a measure to compensate for changes related to fuel prices and ensure the balance in the sea rates. The equivalent term is FAF (Fuel Adjustment Factor).
The baf fee shows the sensitivity to the continuous change of fuel prices in the global market. These fluctuations may depend on the situation of supply and demand for fuel, the change in oil production, fluctuations in crude oil prices and other factors.
Who is the baf surcharge? Which side needs to close?
The BAF surcharges are specified by shipping lines and based on their calculation formula.
The person who must pay the baf surcharges is usually the payer of freight freight through the sea. Typically, the payment party may be the exporter (EXW) or the importer (CIF, DDP).
In some cases, the exporter and importing party may agree to share the baf surcharges at a certain proportion.
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The origin of baf fees in import and export
What is the baf that has been answered? So, where did this fee appear? In the 1970s, the world witnessed the crisis of oil price when fuel prices increased sharply with huge amplitude. In that situation, many shipping lines and shipping units have great difficulties when fuel prices change significantly, affecting their profits.
In order to ensure the goods reach the destination on time, the owner of the goods owner requires the container ships to maintain high speed, making the fuel cost extremely significant. Meanwhile, the price of gasoline continues to increase, shipping lines do not have enough time to adjust the price, leading to significant profits. In this situation, the cost of fuel used becomes an indispensable factor in trade and sale of goods.
How to calculate bafs in import and export
Baf charges are often quite complicated. Here are some basic factors considered when charging:
Fuel consumption
Data on fuel consumption of the shipping ship is used to calculate the BAF fee. Fuel consumption varies depending on the speed and size of the ship;
Current fuel price
BAF fee is usually based on current fuel prices, monitored and updated in real time;
Other influential factors
In addition to fuel prices and consumption levels, factors such as customs regulations, change in ship size and supply situation and requirements can also be considered when calculating baf fees.
Usually will be calculated according to the following formula:
Baf = fuel price x Trade coefficient
* In there:
- Fuel price: Average fuel price at key ports in the world.
- Trade coefficient: Average fuel consumption on one transaction.
What is the role of baf costs in import and export?
In the process of finding out what baf is, businessmen should also understand the role of this fee in import and export. For shipping lines and stakeholders, BAF has great roles such as:
Maintain cost stability
The cost structure of the shipping company and the transportation unit is kept stable at a certain extent. This helps businesses predict and manage shipping costs more effectively.
Maintain profits
Compensate for the fluctuations that occur at fuel prices on the international market. This helps the shipping company to avoid profit loss due to rising fuel price.
Ensuring the order transport progress is planned
For buyers, the baf fee ensures the transport unit maintains the speed of goods and service quality. From there, the goods will return to the port to receive the right time.
Share transport costs
This charge is calculated on the formula or a certain percentage and the shipping company will collect this fee from the exporting or importing side. The division creates fair elements between the parties when participating in import and export and transportation.
Restricting risks
BAF is an effective offset solution, which helps transport units to minimize negative impacts from fuel price fluctuations for profits.
Other charges other than bafs, you need to know
In addition to the baf fee (fuel adjustment fee), shippers also face many other types of fees, including:
Surcharge DDC (Destination Delivery Charge)
Also known as delivery surcharges at the target port. This revenue is used for unloading and container arrangements in the port. The proceeds will be used to pay for the entrance and port.
CIC (Container Imbalance Charge)
Is an additional cost of container imbalance. The goal of the fee is to compensate for the cost of transporting empty containers from the excess to the shortage.
CAF (Currency Adjustment Factor)
Is the adjustment fee according to foreign exchange rate fluctuations. Similar to BAF, shipping lines set and collect this fee from shippers to compensate for the fluctuations of foreign exchange rates during freight.
Gri (General Rate Increase)
Is an increase in freight charges in the peak season, especially in Christmas seasons in the European market.
LSS (Low Sulphur Surcharge)
Is the fee for minimizing sulfur. This amount is collected when sulfur discharge activities exceed the prescribed level.
Pss (Peak Season Surcharge)
Is the fee applied in the peak season. Normally, shipping lines will collect this fee for shipping in the peak season, from August to October every year or from November to January of the next year.
What is the baf and the knowledge related to the fuel price fluctuations of Bunker Adjustment Factor such as origin, role, regulations, cost calculation, ... have been shared by Proship. Accordingly, if businesses, goods owners, carriers, sellers, buyers, ... are wondering about this surcharges, it is necessary to update the above information or contact 0909 344 247 for answers to any questions In terms of fees and surcharges in sea level import and export.
