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Oil collapse and corona outbreak challenge the purpose of BAF

Container shipping lines use the BAF surcharge to ease the impact of the coronavirus, even though the surcharge is meant to cover fluctuations in the oil price, and this could challenge the entire purpose of the surcharge, writes SeaIntelligence.

Photo: LUCY NICHOLSON/REUTERS / X90050

With the plunge in the oil price, the bunker adjustment factor, BAF, which is made to offset fluctuations in the oil price, should have been lowered by the container shipping lines.

But uncertainty in the market and the coronavirus outbreak mean that some of the shipping lines have refrained from changing the rate, reports SeaIntelligence in its latest newsletter.

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