CMA CGM to introduce new BAF Formula from 1st of January 2019
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.
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, the company said in a press release.
In order to ensure the sustainability & reliability of services in this volatile environment, CMA CGM will introduce a new quarterly Bunker Adjustment Formula (BAF) for long term contracts starting from 1st of January 2019.
This new BAF formula will be applicable only on all contracts/quotations with at least 3-month validity starting as from January 1st, 2019. BAF to be applied on top of freight.
Existing 2018 contracts with BAF VATOS still valid during Q1 2019 will keep on running with former BAF formula.
No application of BAF on spot and short-term contracts/quotations with a validity of less than 3 months.