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(CAF) - adjustment applied by liner conferences on freight rates to offset losses or gains for carriers resulting from fluctuations in exchange rates of tariff currencies.



Related Terms

LINER SERVICE

Vessels operating on fixed itineraries or regular schedules and established rates available to all shippers. The freight rates which are charged are based on the shipping company's tariff or if the company is a member of a liner conference, the tariff of that conference.

PARCEL RECEIPT

An arrangement whereby a steamship company, under rules and regulations established in the freight tariff of a given trade, accepts small packages at rates below the minimum bill of lading, and issues a parcel receipt instead of a bill of lading.

POOLING

The sharing of cargo or the profit or loss from freight by member lines of a liner conference. Pooling arrangements do not exist in all conferences.

F.M.C.

Federal Maritime Commission. The U.S. Governmental regulatory body responsible for administering maritime affairs including the tariff system, freight forwarder licensing, enforcing the conditions of the Shipping Act and approving conference or other carrier agreements.

MALPRACTICE

A carrier giving a customer illegal preference to attract cargo. This can take the form of a money refund (rebate); using lower gures than actual for the assessment of freight charges (undercubing); misdeclaration of the commodity shipped to allow the assessment of a lower tariff rate; waiving published tariff charges for demurrage, CFS handling or equalization; providing specialized equipment to a shipper to the detriment of other shippers, etc.

NEUTRAL BODY

An organization established by the members of an ocean conference acts as a selfpolicing force with broad authority to investigate tariff violations, including authority to scrutinize all documents kept by the carriers and their personnel. Violations are reported to the membership and signi cant penalties are assessed.

BUNKER CHARGE

An extra charge sometimes added to steamship freight rates; justi ed by higher fuel costs. Also known as Fuel Adjustment Factor or FAF.

FORWARDER COMPENSATION

Freight forwarder/broker compensation as specified by ocean tariff or contract.

CAF

Abbreviation for 'Currency Adjustment Factor.' A charge, expressed as a percentage of a base rate, that is applied to compensate ocean carriers of currency uctuations.

CARRIAGE PAID TO

CPT - a Term of Sale which means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. If subsequent carriers are used for the carriage to the agreed upon destination, the risk passes when the goods have been delivered to the rst carrier. The CPT term requires the seller to clear the goods for export.

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