BUNKER ADJUSTMENT FACTOR (BAF) - 13 March 2012

As you are aware, Feeders have been recovering increased Bunker costs through a mixture of EMERGENCY BUNKER SURCHARGES (EBS) or CRITICAL BUNKER RECOVERY (CBR).

However, some of these computations have become very historic and we wish to revert to a simple & transparent BUNKER ADJUSTMENT FACTOR (BAF) calculated using an existing industry formula, which takes the increased bunker cost and divides such by the average teu load factor.

This is equitable since it computes cost recoveries by individual trade sector.  To derive the increase we will use last year’s base average of US$650 / tonne for IFO 380 (which was equitable to CBR 4).

Basis the year to date average of US$735 per tonne, the below table indicates the applicable BAF effective from 27/3/12 which was accordingly advertised in the press – see attached.

Furthermore, instead of a monthly review, BAF will only be changed if the variance (between base price and the reviewed average price) is more than USD25 and remains so for 5 consecutive weeks.  (This is in response to feedback from the trade which demanded a more stable BAF.)

As per the present trade practise, a 2-week notice will be given to the trade for any changes in BAF.

BAF is applicable on all Laden GP/Reefer with Empties charged at 50%.

Please note that all booking received by us on or after 27 March 2012 shall be on the basis that you have accepted and agreed to the payment of BAF as indicated above.

We are confident that you can understand our need to recover bunker costs and, as this methodology / formula is already practised in the industry, then the precedent has already been accepted.

With thanks for your understanding on a subject matter well out with our control.

Kind regards

Bengal Tiger Line Pte Ltd

Please view the attachment here:

http://www.btl-feeders.com/downloads/BAF27Mar.pdf