News

New Bunker Adjustment Factor (BAF)

Dear customer,

New emission regulations developed by the International Maritime Organisation (IMO) will come into effect from January 1st 2020 that are designed to reduce global air pollution. By reducing the permissible Sulphur content in fuel from 3.5% to 0.5%, emissions will be reduced by more than 80% providing a significant benefit to human health and the environment as a whole.

As a leader in sustainability and environmental protection, Hamburg Süd fully supports this initiative. Compliance with these new regulations will, however, come at a cost. Cost Volatility of suitable fuels are also expected to increase as we move to full compliance by January 2020.

To adjust to this new environment, Hamburg Süd will replace the current Bunker surcharge with a new Bunker Adjustment Factor (BAF) calculation. The new BAF is designed to provide customers with a simple formula that will allow the BAF charges to be calculated for any Trade lane at any fuel price.The new BAF is designed for Cost Recovery and will be charged independently from the Ocean Freight charges.

The BAF will be calculated using Fuel Price and a Trade Factor based on following:

Fuel price X Trade factor = BAF

Fuel Price: Calculated using average fuel price from key bunkering ports (ie. Rotterdam, Singapore, Panama, Fujairah)

Trade Factor: Reflects average fuel consumption per Trade using variables such as trade imbalances, fuel efficiency, Reefer Factor and Transit times

We have provided examples of BAF levels for large Hamburg Süd trades at different fuel prices in Table below. Note, to cover the average additional fuel consumption of reefer containers there is a reefer factor of 1.5.

We have also provided a list if FAQ’s which provide additional information.

For examples and FAQ's, please click here (PDF, 409 KB) .

Hamburg Süd appreciates your continued support and should you require any additional information, please do not hesitate to contact your local Hamburg Süd representative.