CMA CGM: New BAF on Europe-Africa trade

Bunker is one of the most important costs for a container shipping line. IFO 380 price has increased considerably over the last 12 months with a 40 % year to date increase compared to 2017 average. On top of the above a new IMO (International Maritime Organization) low sulphur regulation will be applicable to all container shipping companies as from 1st of January 2020. It will set a maximum sulphur content threshold of 0.5% for marine fuels over 100% of the sea distance for any maritime services, including between Europe and Africa.

To be compliant with this new regulation, CMA CGM will use low sulphur fuel (LSFO) and the cost per ton is expected to be significantly higher than IFO 380.

In order to ensure the sustainability & reliability of our services in this challenging environment, CMA CGM will introduce a new quarterly Bunker Adjustment Formula (BAF) for long term contracts starting from 1st of January 2019.

Methodology:

Quarterly revision, based on IFO 380 bunker average price or LSFO depending on contract duration.

Implementation:

This new quarterly BAF will be applied for all contracts with validity period above 3 months starting as from January 1st, 2019.

BAF quantums:

Based on the average tonnage of fuel consumed on Europe-Africa trade, the following quantums will be applied depending on the fuel price fluctuation.

Below table is only given as an example of BAF quantums per container size. Official BAF tariffs for Europe to Africa trade will be communicated at a later stage as per applicable regulations.

BAF Europe Africa