Maersk Introduces BAF Formula

Monday, January 21, 2008
Maersk Line is pleased to introduce a new formula for our floating BAF (Bunker Adjustment Factor). Bunker prices have tripled within the last three years and bunker costs now constitute nearly half of the total vessel costs, up from 20% ten years ago.

Maersk Line has 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. 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.

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