Currency Adjustment Factor (CAF)
Also known as: caf, caf surcharge, currency adjustment, currency adjustment factor, exchange surcharge
Currency Adjustment Factor is a surcharge or adjustment applied to freight rates to compensate for changes in currency exchange rates. Carriers may collect freight in one currency while paying operating expenses in another, creating financial exposure when exchange rates fluctuate. CAF helps reduce the impact of these currency movements on the carrier's transportation costs.
CAF is commonly associated with liner shipping and may be expressed as a percentage of the base freight rate or incorporated into the overall freight charge. The amount can increase or decrease depending on exchange-rate movements and the carrier's pricing methodology. It is generally reviewed periodically and may vary by trade route, carrier, and currency exposure.
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