- Q: Why does Maersk Line want to have its own BAF formula?
A: Maersk Line works as an independent carrier, and we believe that Maersk Line's BAF formula will better reflect the actual cost picture.
- Q: Why doesn’t Maersk Line apply conference BAF any more?
A: Conferences related to European trade will expire in 2008. We see this as an opportunity for Maersk Line to make a stand and provide our customers with a simple-to-use bunker calculation.
- Q: How do you intend to roll out the BAF formula for the different trades?
A: It is important to note that the BAF levels shown in the BAF Calculator will not be part of the individual Maersk Line tariffs before the trades separately announce its implementation. A detailed roll-out plan can be found on maerskline.com
Roll-out plan for Maersk Line BAF
The various trades will adopt the BAF formula in the course of 2008 until 1 January 2009. Maersk Line will retain its conference memberships of e.g. TACA and FEFC throughout most of 2008 and continue to use the conference BAF until it expires. Other trades will implement sooner.
- Q: Will all your routes use the same formula?
A: Maersk Line is going to apply the same formula to all trades.
- Q: How will Maersk Line announce its BAF changes?
A: Changes will be announced through maerskline.com/baf. We will also continue to send out customer advisories and updates to all our subscribers. You can sign up for subscriptions on:
http://www.maerskline.com/subscription
- Q: If Maersk Line uses the same formula globally, why is the input (variables) different?
A: We use the same form for each trade to maintain consistency. The variables may differ from trade to trade because of different vessel types, different consumption, headhaul to backhaul ratios, utilisation etc. This means that the BAF for each trade will match Maersk Line’s variable bunker fuel cost.
- Q: When will the “constant” in your formula be updated?
A: The “constant” is indeed "constant" and will not change unless significant changes are made to the rules. While we do not expect any major changes, we intend to make an annual review of the form and will of course justify any alterations we make. It is important to bear in mind that such changes will directly correspond to the results of Maersk Line’s efficiency gains, so figures may move up or down.
- Q: Carriers often promote their operating skills, but how do I, as a customer, reap the benefits of improvements in Maersk Line’s network efficiency?
A: Any gains in efficiency made by the Maersk Line network are worked into the formula. We only charge for the actual cost, which is the strength of the BAF formula. We apply Maersk Line specific values.
- Q: How do I as a customer benefit from the new BAF formula?
A: The benefit to the customer is that the price of transportation is adjusted to reflect the actual cost of fuel at all times, as opposed to a scenario where the carrier has to cover the unforeseen up front. In the latter case the customer will usually pay a premium.
Maersk Line will provide a transparent, simple, and fair BAF formula which applies to all trades. With the introduction of the Maersk BAF formula, our customers will experience a fair and equitable way of applying BAF.
- Q: In which quantum will the changes be made, will you round to the nearest USD 5/40’?
A: The minimum change, up or down, will be increments of USD 5/20' and USD 10/40'
- Q: What do you use as "calculation date" when applying BAF to a shipment?
A: The BAF in the Maersk Line tariff will be applied based on the date when the last container in a shipment is gated in. In other words, the BAF will strictly follow the calculation date of the ocean freight price.
- Q: Will it in any way benefit the customers that Maersk Line slow steams in certain trades?
A: Slow steaming will have a positive effect on the BAF level as one of the variables in the BAF formula is fuel consumption. It will thus be of benefit to our customers if the vessel speed is reduced.
- Q: How do you determine the monitoring period?
A: It depends whether the BAF is changed monthly or quarterly. Follow the links to see examples of how the data is sourced over a predefined period before the BAF becomes valid.
- Q: What is the base bunker element?
A: The base bunker element is determined by criteria that differ from trade to trade. Some use an average bunker price monitored in relevant ports during 2007 and some use the present conference BAF. At this specific bunker price level the BAF is 0 and this base bunker element is incorporated into the ocean freight rate. In other words, this is the part of the bunker cost which is assumed by the carrier. The trades will continue to monitor the bunker prices on a monthly or quarterly basis. If the average price increases compared to the base bunker element the BAF will go up and if it turns out lower the BAF will decrease.
- Q: Do you monitor bunker prices on a daily basis?
A: Yes, the monthly monitoring period runs from the 26th in one month to the 25th in the next month. During this period we monitor the bunker prices on a daily basis and then take the average of all figures in order to calculate the new BAF level.
Should you require further information please contact your local Maersk Line office » Click here
