Currency adjustment factor (CAF),
Definition of Currency adjustment factor (CAF):
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.
Adjustment applied to offset losses or gains resulting from fluctuations in currency exchange rates.
A currency adjustment factor is an additional cost on trades between the United States and Pacific Rim countries.
Meaning of Currency adjustment factor (CAF) & Currency adjustment factor (CAF) Definition