Currency Adjustment Factor update
CMA CGM Group announces implementation of a Current Adjustment Factor (CAF) in Euros on new discharge zones for all types of containers as from April 1st, 2015, the company said in its press release.
Zones of loading: North Europe / Scandinavia / Poland / East and West Mediterranean / Baltic / Adriatic / Black Sea / North Africa / Morocco
Destinations and CAF amounts:
To Pacific Islands: 6.17%
To Indian Ocean Islands: 7.28%
To West Africa: 7.28%
On the North Europe-Mediterranean trade, the CAF presently in place will move from 10% in March 2015 to 12,53% in April 2015.
This decision follows the sharp decrease of the Euro versus US dollar from more than 1,35 Dollar for one Euro one year ago to less than 1,15 today. The currency Adjustment factor is a percentage of the Seafreight that is reflecting the split of the total transportation costs per currency and the evolution of those currencies versus the Euro which is the currency in which the freight is quoted. Whilst Freight and THC’s are quoted in Euro, a large portion of costs are in US dollars (Vessels costs, Bunker, Some stevedoring and port costs).
Example :
Total costs of line having revenues in Euro is : 50 euros + 100 usd
At 1,35 the total cost in Euros is 50 + 100/ 1,35 = 124 Euros
At 1,15 the total Cost in Euros is 50 + 100 / 1,15 = 136.9 euros
CAF is therefore : (136.9 – 124) / 124 = 10.4%
