Financial Adjustment Factor (FAF)
Fuel costs are understandably one of the most significant and variable cost components of our business. As such, a Fuel Adjustment Factor (FAF) is being introduced for the purpose of recovering the increased costs of the vessels fuel to promote financial integrity and future sustainability.
Fuel Adjustment Factor FAQ
How much will the FAF cost me?
The FAF will be calculated on the average diesel price from the two previous vessel bunkering
events in NZ. By using this method, we can:
- Provide transparency for customers to see how it is calculated.
- Take into account any shifts in the price of fuel that impact significantly on the price of moving freight.
How will this impact my business?
We will be using a base rate excluding GST.
The unit rate is a result of:
- Price per litre of fuel
- + Price of transporting fuel to the vessel
- + Labour provided by the vendor to bunker into the vessel.
FAF will be rounded up to the nearest cent. This is updated at each bunkering event and
automatically applied to your invoice.
Nationally and globally, the transportation markets have seen massive increases in fuel prices. In the
past, CISL has tried hard to absorb these costs, minimising the impact on our customers.
Unfortunately, prices have come to a level where we must follow other transport operators in
implementing a "fuel surcharge" system. This is now an industry standard.
Will I be notified of each increase?
Our website will be updated at each bunkering event detailing the increase/decrease for that
month.
What is the current 'base rate' at which I will be charged FAF?
The FAF base rate is $0.95 + GST. It tis the average price paid per liter by CISL to date in 2019.
Every 1c movement above $0.95 will result in 0.13% increase against goods.
Example:
- Base rate - $0.95
- Fuel Price - $0.97
- FAF 0.26%
-
Freight* $100.00 FAF $0.26 Total $100.26 - * Note only tangible freight is subject to FAF. Council dues and other auxiliary charges are exempt.
How will it be applied to my invoice?
The FAF will be applied to all tangible freight (including livestock and fuel cargo) at the bottom of
the invoice. Auxiliary charges such as Council Dues will be exempted from the fuel surcharge.
When will the implementation of the FAF commence?
The implementation of the FAF will be at the beginning of the financial year, July 1st, 2019.
Book Your Cargo
You can now use our online booking form. Please ensure it is completed and submitted prior to delivery.