Wallenius Wilhelmsen, a market leader in roll-on/roll-off (RoRo) shipping and vehicle logistics, has unveiled its re-engineered Bunker Adjustment Factor (BAF2.0), a critical step in its journey toward achieving net-zero emissions by 2040. Designed to adapt to the rapidly evolving fuel landscape, BAF2.0 aims to provide greater transparency and predictability in fuel pricing as the maritime industry transitions to alternative fuels.
Streamlining the Transition to Alternative Fuels
The Bunker Adjustment Factor (BAF) is a widely used pricing mechanism that adjusts freight rates based on fluctuations in fuel prices. Historically, BAF has been linked to traditional marine fuels like VLSFO and MGO. However, as the industry accelerates its efforts toward sustainability, Wallenius Wilhelmsen recognizes the need for a more dynamic system that accommodates the growing mix of alternative fuels, including biofuels, bio-LNG, methanol, and ammonia.
The introduction of BAF2.0 ensures that this future fuel mix is integrated into a single charge, streamlining the adoption of alternative fuels and enhancing cost predictability for both carriers and customers.
Xavier Leroi, Chief Operating Officer of Shipping Services at Wallenius Wilhelmsen, explains “The re-engineered BAF is important in our net-zero journey. We believe delaying the switch to net-zero fuels will only increase costs later. BAF2.0 represents a considerable step toward future-proofing the shipping industry.”
A Future-Focused Approach
BAF2.0 is not about reinventing the BAF concept but rather evolving it to meet the needs of a multi-fuel future. Wallenius Wilhelmsen’s fuel mix will gradually phase out fossil fuels in favor of more sustainable options, reducing the reliance on conventional fuels like VLSFO and MGO. In turn, this approach aims to support the broader maritime industry in transitioning to greener alternatives.
The new BAF will function as the previous system did—capturing fuel price fluctuations—while incorporating the cost implications of future fuel types. This ensures a smoother transition to net-zero fuels and greater cost transparency in an increasingly complex fuel market. “We strongly believe this is the way forward for the industry,” Leroi adds.
Ensuring Compliance and Cost Transparency
The shift to a multi-fuel future comes with the challenge of navigating new regulations and a more complicated fuel mix. BAF2.0 aims to simplify these complexities by offering clear and predictable fuel costs while also helping customers meet stringent environmental regulations.
Pia Synnerman, Chief Customer Officer at Wallenius Wilhelmsen, said “A re-engineered BAF that is prepared for future fuels will give our customers increased predictability of fuel costs in a landscape where the fuel mix will only become more complicated. A new BAF also allows us, with our customers, to ensure compliance with environmental regulations as they become stricter.”
The Road Ahead
Starting January 1, 2025, BAF2.0 will be applied to all new ocean business, marking a significant milestone in Wallenius Wilhelmsen’s net-zero transition. By introducing BAF2.0, the company not only helps shape the future of marine fuel pricing but also positions itself as a leader in the industry’s move towards sustainability. With a clear focus on cost transparency and regulatory compliance, Wallenius Wilhelmsen’s re-engineered BAF provides a vital tool for customers navigating the complexities of the green transition.
As the maritime industry embraces new fuel types and prepares for stricter regulations, BAF2.0 is set to play a crucial role in ensuring a smooth and cost-effective journey toward a net-zero future.
About Wallenius Wilhemsen
The Wallenius Wilhelmsen group is a market leader in roll-on/roll-off (RoRo) shipping and vehicle logistics, overseeing the distribution of cars, trucks, rolling equipment, and breakbulk to customers worldwide.
The company operates approximately 130 vessels servicing 15 trade routes across six continents, alongside a global inland distribution network, 120 processing centers, and eight marine terminals. Headquartered in Oslo, Norway, the Wallenius Wilhelmsen group employs 8,200 individuals in 29 countries globally. The company’s mission is to construct sustainable supply chains, envisioning innovative and eco-friendly solutions for the evolving landscape of mobility and transportation, both on land and at sea.
To ensure the safe and efficient movement of cargo, we rely on our dedicated team of 8,200 individuals, working as truck drivers, port staff, personnel at 121 processing centers, and in offices spanning 29 countries. Our fleet of over 130 vessels traverses every ocean, boasting some of the lowest emission levels in the roll-on/roll-off segment. Furthermore, we employ cutting-edge systems and software, easily accessible on handheld devices, to facilitate the seamless flow of cargo information in real-time.
Source Wallenius Wilhemsen