The term “Cost, Assurance, and Freight” (CAF) is also known as the Currency Adjustment Factor. It is a charge applied on top of ocean freight rates by carriers to account for currency fluctuations in different countries. This is particularly relevant in international shipping, where transactions involve multiple currencies.

Calculation: CAF is usually calculated as a percentage of the freight cost and is adjusted periodically based on the prevailing exchange rates. This percentage can vary depending on the currency pairs involved and the volatility in the forex markets.

Impact on Costs: For importers and exporters, the CAF can significantly affect the total shipping costs, especially when dealing with currencies that are highly volatile. It is an important factor to consider when planning budgets for international shipping.

Invoice and Payment: The CAF is typically listed separately on the freight invoice, allowing customers to see how much of their total cost is due to currency adjustments.