Bunker, Bunkering and Bunker Adjustment Factor

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What are these three terms Bunker, Bunkering and Bunker Adjustment Factor (BAF) that we hear quite often in shipping circles..??

A bit of a historical background first.. Soon after its introduction into the industrialized world as a source of power, steam quickly became a dominant force in both land (locomotives) and sea transport (steamships)..

Steamships used the power of steam to travel and steam was generated by feeding coal into the furnaces on board the ship.. The storage containers for coal was known as a BUNKER..

Since coal was the original fuel for steamships, the term bunker became synonymous with fuel and therefore Bunker is simply nothing but FUEL (oil) used in ships..

There are various types of Fuel Oil and within the Fuel Oils, there are many classifications, standards and grades..

Few types of Fuel Oils are :

MGO (Marine gas oil), MDO (Marine diesel oil), IFO (Intermediate fuel oil) , MFO (Marine fuel oil), HFO (Heavy fuel oil) ..

Bunkers are supplied through various means such as bunker barges, pipelines, road tankers etc.. This depends on the port in question and the accessibility to the ship..

The act of supplying a ship with bunkers is known as bunkering..

What is bunker and bunkering

A major portion of the ships operating cost is “bunkers”.. As you may have seen, oil prices are quite volatile, and therefore ship operators or owners maybe unable to calculate a consistent operating cost for their ships..

In order to counter the fluctuations in oil prices, the shipping lines charge a surcharge on top of the ocean freight, known as Bunker Adjustment Factor (BAF).. This BAF is usually aligned with the movement of the oil prices much like the fuel for our cars.. When oil prices go up, BAF goes up and when oil prices come down, BAF also comes down..

In some trade lanes, BAF maybe included in the freight rate and may not be shown separately in you freight quotation or invoice..

So the next time you hear that a ship is in port for bunkering, you know that it is there just to fill up some fuel..

Simple, isn’t it, but be prepared to be charged a Bunker Adjustment Factor for the bunkers the ship carrying your cargo burnt.. 🙂

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31 comments on “Bunker, Bunkering and Bunker Adjustment Factor”

  2. By Kasun Jayaweera Reply

    Ashish S has a good point. It takes a lot of work and precision! When a ship comes near the port, plenty needs to be done from the shore – providing fuel, bunkering, de-bunkering, arranging ship supplies, fresh water supplies and even crew transfers between the ship and the port. All of these services, bunkering especially, should be kept in mind and arranged in advance.

  3. By Norma Reply

    Hi everyone!
    I am new to this site. It is very interesting especially terms on shipping as they are not very commonly used. I would like to thank to Ashish S, for sharing his link. It provides me a fascinating subject to read about.

  4. Pingback: Why Should There be Shipping Alliances, What Do They Do and What Does it Mean? – Freight Hub

  5. By satyam7252 Reply

    In the latest report published by Credence Research, Inc. “Bunker Fuel industry: Growth, Future Prospects and Competitive Analysis, 2015-2020,” the global bunker fuel industry was valued at US$ 244 Bn in 2014, and is expected to reach US$ 288.3 Bn by 2020, expanding at a CAGR of 2.8% from 2015 to 2020.
    https://goo.gl/XhEBLu

  6. By Anshul Reply

    Dear Sir

    If you could help me giving few idead of how to approach ships and other people for bunkering if am in diesal sales as i am new in the company and would like to get some good contracts.

    Regards

  8. By Mzwandile101 Reply

    on my side the article help us to have a knowledge and the understanding of how the two names differ as I have the knowledge of what is to bunkering and bunker and the different types of fuel oil like (marine diesel oil, intermediate fuel oil, marine fuel oil, heavy fuel oil) and how to do metainformation which includes (ref no , kin visc , dynamic visc , density and multiple temparature

  12. By Harley Cooper Reply

    Can anyone suggest how I can find out who is buying a particular quantity of crude oil and the price they are paying at a particular port

    • By Andy

      Hi.
      Contact Haider at Glander international bunkering.
      I dealt with him in the past, he is a good man.

  15. By Andrew Chu Reply

    Hi everyone, I’m searching on the site tips for doing oil logistics (help import/export oil and fuel) and this one comes up.

    Has anyone ever done it b4? Any general or specified tips? I would be grateful to receive any comments!

  17. By Patricia Reply

    You have just “saved my life”! I am a translator in Brazil and no dictionaries were able to tell me that bunker refers to fuel! Thanks a million!

  18. By Ashish S Reply

    Well Simple it looks like, but it is not 🙂 Ask engineers out there (Sarcastically). Bunker operations needs to be taken care a lot, as it posses a great environment concern if any oil spill occurs. There have been many cases, when bunker operations gone haywire and repercussion they had were tragic.

    if some body is interested out there to read more about it you can visit this link (No i am not droping baclink, just thought to share knowledge about it 🙂 http://www.marinersgalaxy.com/2013/03/what-is-bunkering-process-how-it-is.html

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