BAF Meaning: When Does the Bunker Surcharge Apply?

BAF is a surcharge that carriers add on top of the base ocean freight rate to reflect changes in the price of ship fuel (bunker). Carriers recalculate it from average fuel prices over a set period, so the total freight can change with the sailing date even when the base rate stays the same. That is why BAF needs its own check on every quote and invoice.

Key takeaways

• BAF (Bunker Adjustment Factor) passes fuel-cost changes to shippers as a charge separate from the base rate.
• Maersk publishes its BAF as “trade factor × fuel price” and reviews it every quarter.
• Under Incoterms, whoever pays the ocean freight also pays BAF: the seller under CFR, CIF, CPT and CIP, the buyer under EXW, FCA, FAS and FOB.

What is BAF?

BAF is the surcharge a carrier adds to pass changes in vessel fuel costs on to shippers. Fuel costs swing with oil prices, so carriers keep them out of the base ocean rate and adjust them separately.

Under MARPOL Annex VI, the International Maritime Organization (IMO) cut the sulphur limit for ship fuel used outside emission control areas (ECAs) from 3.50% to 0.50% m/m on 1 January 2020; inside ECAs the limit is 0.10%. IMO says most ships now use very low sulphur fuel oil (VLSFO), and Maersk uses the VLSFO (0.5% sulphur) price to calculate its BAF.

Why is BAF charged separately from the base rate?

Renegotiating the base rate every time fuel prices move would make contracts unstable. Carriers split out the fuel part as BAF and adjust only that on a schedule.

A low base rate on a quote can therefore still mean a high total if BAF is large. The invoice total is the base rate plus BAF, terminal handling charges (THC), documentation fees and other items. THC is covered in What Is THC? Terminal Handling Charges and Who Pays.

How is BAF calculated?

Methods differ by carrier, but Maersk’s standard BAF appendix states the formula “BAF = Maersk Trade Factor × Fuel Price”. The trade factor is set per trade lane, and the fuel price is an average over a fixed reference period.

Here is what the Maersk appendix sets out.

Item	Maersk standard BAF appendix
Trade factor	Reflects bunker consumption per loaded container and the headhaul/backhaul volume imbalance on the trade (ton/FFE, i.e. per 40 ft); reviewed annually and valid for the calendar year
Fuel price	Platts delivered VLSFO (0.5% sulphur), averaged over Rotterdam, Singapore and Balboa
Review frequency	Quarterly (new BAF effective 1 January, 1 April, 1 July and 1 October)
Trigger	Recalculated only when the fuel price moves USD 10 per ton up or down
20 ft conversion	0.5 × the 40 ft BAF, except on trades into and out of the US West and East Coasts

For example, Maersk said the BAF effective 1 January 2026 used an average VLSFO price of USD 461.54 per ton for 26 August to 25 November 2025. Other carriers may use a different formula, review cycle or reference fuel, so check the notice from your carrier or forwarder.

Who pays BAF under Incoterms?

BAF is part of the ocean freight, so under Incoterms 2020 the party that contracts and pays for the main carriage also pays BAF. The seller pays main carriage under CFR, CIF, CPT, CIP and the D rules; the buyer pays it under EXW, FCA, FAS and FOB.

Remember that under the C rules the seller pays the freight but the risk has already passed to the buyer in the export country. The cost and risk points of each rule are in Incoterms 2020: Risk and Cost Points of All 11 Rules.

What should you check on quotes and invoices?

First check whether BAF is included in the rate or listed separately, and how long it is valid. The BAF on the day you get the quote can differ from the one that applies when the cargo sails. To check the other lines on the quote, see Ocean Freight Quote: Which Line Items Should You Check?.

• Check whether the quote is all-in or lists BAF as a separate line.
• Check which date or period the BAF amount is based on, and when the quote expires.
• Check the unit for 20 ft, 40 ft and reefer containers.
• For LCL (less than container load) cargo, ask the forwarder how it splits BAF across your shipment. The difference between FCL and LCL is in FCL vs LCL: Meaning, Cost Math and When to Use Each.
• If the invoice differs from the quote, ask for the fuel-price period and the carrier notice that were applied.

What are the common mistakes?

The most common mistake is costing a shipment on the base rate alone. A separate BAF can change the total freight a lot.

Other mistakes are signing without checking the quote’s validity, so a different BAF applies at sailing, and adding BAF to your own costs when your Incoterm puts the freight on the other party. Match the contract terms with the quote terms.

FAQ

How is BAF different from CAF?

BAF reflects fuel-price changes, while CAF (Currency Adjustment Factor) reflects exchange-rate changes. Both can appear on the same invoice, so check each line.

When does BAF change?

It depends on the carrier. Maersk reviews it quarterly and recalculates only when the fuel price has moved USD 10 per ton or more.

Can BAF be negotiated?

Carriers base it on their published tariff, so an individual shipper usually cannot change it. Confirm long-term contract terms directly with the carrier or forwarder.

What if BAF on the invoice differs from the quote?

First check the quote’s validity period and the BAF reference date. Then ask the forwarder or carrier for the fuel-price period and notice they applied.

Sources

• IMO, IMO 2020 – cutting sulphur oxide emissions
• Maersk, Bunker Adjustment Factor (BAF) Appendix
• Maersk, Bunker Adjustment Factor (BAF), notice of 1 December 2025
• International Chamber of Commerce (ICC), Incoterms® 2020
• Related posts: What Is THC?, Incoterms 2020, FCL vs LCL

Last checked: 2026-10-28