The currency adjustment factor (CAF) is a fee that is applied on top of freighting charges for carrier companies. It is designed to offset any losses that may result from constantly fluctuating exchange rates between the US dollar and other currencies.

The CAF is typically applied as a percentage on top of the base exchange rate, which is calculated as the average exchange rate for the previous three months. The CAF increases as the value of the US dollar decreases, which means that it will be higher when the dollar is weak and lower when the dollar is strong.

Many shippers try to minimize the impact of the CAF by entering into "all-inclusive" contracts at a fixed price that accounts for all applicable charges. This can help to provide some predictability and stability in terms of costs, as the shipper knows exactly what they will be paying for the transportation of their goods.

It's worth noting that the calculation basis and methodology for the CAF can vary from carrier to carrier, so it's important for shippers to carefully review the terms of their contracts to understand how the CAF will be applied.