No Longer Baffled by BAF, CAF, and FAF: A Glossary of Transportation Surcharges

March 29, 2011
By Michelle Kelley

Many shippers don’t know about the vast array of transportation surcharges that their goods may incur while traversing the globe. Avoid sticker shock when open your next invoice by expanding your knowledge of these surcharges.

accessorial charge
Charged by a transportation carrier for providing services other than basic transportation (forklift, heavy lift, etc.). Also known as ancillary charge.

ancillary charge
See accessorial charge.

See Bunker Adjustment Factor.

Bunker Adjustment Factor (BAF)
Charged by ocean carriers to compensate for increased fuel (bunker oil) costs. Also known as bunker surcharge.

bunker surcharge
See Bunker Adjustment Factor.

See Currency Adjustment Factor.

Chassis Usage Charge
Charged by transportation carriers for the use of a container chassis.

congestion surcharge
Charged by transportation carriers to cover the increased costs of operation to, from, or within a congested area, such as port.

container rental charge
Charged by a transportation carriers for use of the carrier’s intermodal container.

Container Service Charge (CSC)
Charged by terminals for the positioning of containers in a terminal or yard.

See Container Service Charge.

See Chassis Usage Charge.

Currency Adjustment Factor (CAF)
Charged by ocean carriers to offset foreign currency fluctuations.

See Fuel Adjustment Factor.

Fuel Adjustment Factor (FAF)
Charged by a transportation carrier to recover the cost of fuel.

General Rate Increase (GRI)
An increase in transportation rates by carriers serving a particular market segment.

See General Rate Increase.

Peak Season Surcharge (PSS)
Charged by ocean carriers during periods when vessels are carrying at full capacity, this surcharge offsets losses from slower/less productive periods.

piracy surcharge
Charged by ocean carriers to cover the risk of operating in waters where attacks are commonplace.

port congestion surcharge
Charged by ocean carriers to cover the increased costs to operate at a congested port.

See Peak Season Surcharge.

Terminal Handling Charge (THC)
This charge combines wharfage charge and handling charge into a single charge, typically assessed on the same rate basis as the basic transportation rate. In general, this charge covers the carrier’s terminal facility, CFS, stevedore contractor and wharfage costs.

See Terminal Handling Charge.