A tool for importers & exporters

This is a FREE service supplied by Freight Training. Each working day we will give you a definition of an expression used in the freight business. Over time, this will give you access to an archive of terms, explained in an understandable manner. -------------------------------------------------------------------------------- Currency Adjustment Factor : (Commonly referred to a CAF) Although the unit of currency used for the Freight Rate is normally the US$, obviously the ship’s costs will be incurred in any of a range of currencies dependant on the trade route, ownership or nationality of the vessel or vessel’s owner or of the crew etc. The Carrier must convert the dollars received for freight into other currencies, so if the dollar deteriorates or improves against those currencies, the Carrier could have too little or too much.When the Carrier is not getting enough Dollars in to pay all of the anticipated other-currency costs, they introduce a positive CAF. If they have too many dollars coming in (because the dollar has grown stronger since they did their first calculation) they may introduce a negative CAF.CAF is generally expressed as a percentage of the basic Freight Rate. A positive CAF of 5% would mean that the advertised Freight Rate of $1000 is now $1050. A negative CAF of 5% means the rate would drop to $950.Sometimes this type of surcharge can be expressed as a lump sum, a single add-on per container size type.A positive CAF of $100 for example will raise the original rate to $1100 and so on. It is far easier for the Carrier to advertise the surcharge they have calculated than to re-write the many different rates they may have offered various people. The next "Exporting into Africa" course in Johannesburg is to be held on 30th August 2000 - BOOK NOW! The next Freight Management course in Sarnia, Ontario is to held on 23rd August - BOOK NOW! -------------------------------------------------------------------------------- Freight Training SA (Pty) Ltd. All Rights Reserved. Limited distribution of this text is allowed on the strict condition that the expression “ Freight Training SA (Pty) Ltd” is included in the foot of the text along with reference to our web site www.freighttraining.co.za. If the "Unsubscribe" feature is unavailable, please send an e-mail with the word "Unsubscribe" in the subject line to If you wish to have this message sent to a friend or colleague, please send an e-mail with their address to