CURRENCY ADJUSTMENT FACTORS: SOME ALTERNATIVE STRATEGIES

The purpose of this paper is to consider some of the issues arising from currency fluctuations or currency disparities and in particular their effects upon freight earnings through the application of a currency adjustment factor (CAF). The operation of CAFs has been a source of great concern to shippers and shipper's councils since their introduction some seven years ago. The basis of this concern has been the widening differential of applicable CAFs as a surcharge on basic freight rates. The CAF system has been regarded by many as iniquitous and punitive. Conferences have been accused of insulating themselves from currency losses due to exchange-rate variability consequent upon the introduction of flexible exchange rates in 1971. However, this mounting pressure has brought the operation of the CAF formula under close scrutiny especially from four sources. (a) Some member Councils of the European Shippers' Council (ESC). (b) The Japanese Shippers' Council (JSC). (c) The question of the legality of differential CAFs under the Treaty of Rome. (d) Complaints from North Continental Maltsters.

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  • Corporate Authors:

    Taylor & Francis

    4 Park Square, Milton Park
    Abingdon,   United Kingdom  OX14 4RN
  • Authors:
    • O'Brien, T R
  • Publication Date: 1980-10

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Filing Info

  • Accession Number: 00330946
  • Record Type: Publication
  • Files: TRIS
  • Created Date: May 21 1981 12:00AM