Q4 2018 Bunker Adjustment Factor

Please be aware that carriers are expected to increase BAF (bunker adjustment factor) for trans-Pacific Eastbound ocean freight for the fourth quarter of 2018.

With trans-Pacific Eastbound contracts heavily negotiated in the first quarter of the year, carriers generally implement initial BAF amounts that they feel will dampen the effect of expected spikes and drops in fuel prices throughout the calendar year. However, in the event that fluctuations in pricing are greater than originally anticipated, subsequent quarterly BAF rates are often adjusted in an effort to mitigate realized shortfalls. Announcements regarding BAF increases for the 2018 fourth quarter reflect this practice and are not unexpected given marketplace volatility this year.

As always, AGL will advise you of any additional information related to supply chain market conditions.