What is the Bunker Adjustment Factor?

All of the of the numerous surcharges and fees in international freight shipping, even the most novice shipper is familiar with the bunker adjustment factor. This particular fee, also known as the bunker surcharge, has existed in container shipping for many decades. Essentially, the bunker adjustment factor is an equation that exists to cover the carrier’s expenses as it relates to the price of fuel. As you can guess, the price of fuel is constantly changing. And it is because of those price fluctuations that the bunker adjustment factor also changes.

Some studies have suggested that the fuel of a vessel makes up almost half of the ocean shipping expenses. Some shippers figure that the bunker adjustment factor prices are similar to the increases for crude oil. The truth is that bunker oil costs are incredibility different from crude oil costs.

In the past, the shipping companies held carrier conferences that were used to determine the bunker price increases for certain lanes during the year. Now, the circumstances are different. Independent carriers, such as Maersk Line, have their own bunker adjustment formula that they say can more accurately predict the real fuel expenses for certain lanes. The prices are changed quarterly.

The next time you receive an ocean freight shipping quote, realize that this might not be the final price. The price of bunker fuel will change in the future, and those shipping rates in the future might also change. Speak to your trusted freight forwarder about your questions concerning the bunker adjustment factor.

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