2008 BAF Forecast

2008 could be an interesting and costly year for importers. With the price of oil skyrocketing to record levels, many transportation providers are feeling the pinch. Bunker costs have increased dramatically over the past year and from everything I am reading in regards to BAF surcharges, the trend will continue through 2008. Many of the ocean carriers within the TSA (Trans-Pacific Stabilization Act) have announced that all new ocean contracts effective May 1st of 2008 will be subject to increased and fluctuating bunker surcharges. I do not have all of the details, but have heard that the price of BAF could fluctuate on a quarter by quarter basis.

In addition to the new BAF levels beginning in May, many Trans-Pacific carriers are attempting to implement an emergency BAF (E-BAF) beginning at the start of the new year. In terms of price, I am hearing anywhere between $200 and $300 per ‘40 container.

It will be interesting to see how effective the carriers will be in implementing the E-BAF surcharge in January 2008, but unless you have major pull with the lines, it looks like the increased and fluctuating BAF levels beginning in May will stick. Check with your providers for any additional information and see what they are doing to mitigate the proposed increases.