Currency Adjustment Factor (CAF)

The Currency Adjustment Factor (CAF) is a surcharge applied by shipping lines or carriers to account for fluctuations in exchange rates between the currency of the shipping line’s operating costs and the currency in which freight rates are quoted. As exchange rates fluctuate, the cost of operating a vessel, such as fuel, labor, and port fees, may vary based on currency denominations. The CAF allows carriers to adjust their freight rates to offset these currency-related cost fluctuations. It is often applied as a percentage of the freight rate and is subject to change periodically in response to currency market movements.