Glossary
Terms & Glossaries of Shipping and Trading
CAF (Currency Adjustment Factor)
The currency adjustment factor (CAF) is an additional cost on trades between the United States and Pacific Rim countries. The levy is imposed by shippers in that region to cover currency fluctuations while goods are in transit and to account for a declining value of the U.S. dollar over time.
The currency adjustment factor is applied in addition to the freight costs incurred during trades between these countries. It was enacted in response to the additional costs that shipping companies were incurring when they were dealing with exchange rates between the different currencies. The CAF is a percentage that is applied to fees, in addition to the base exchange rate. It is calculated based on the average of the exchange rate over the prior three months.
