Fuel adjustments + the negative BAF question

Fuel adjustment is one of the quieter line items on a freight quote. Most of the time the operator doesn't look at it. When Brent moves, suddenly it's the line that matters.

The mechanism is simple. Each lane carries a baseline fuel assumption and a coefficient f that maps the delta between current Brent and the baseline into a per-MT adjustment. When current Brent is above baseline, f > 0 and the adjustment adds to freight. When current Brent is below baseline, f < 0 and the question is: does the freight number actually go down?

The answer is contract-dependent.

Indexed vs non-indexed

If the carrier contract is fuel-indexed, the answer is yes. The contract genuinely passes fuel savings through to the buyer, and the negative f should pass through to the rendered freight number. The engine should let f apply with its native sign.

If the carrier contract is not fuel-indexed (or if the lane is being priced from a benchmark without an explicit indexing clause), the answer is no. The contracted freight is the contracted freight. Brent dropped; the buyer doesn't get a refund. The engine should clamp f at zero: max(0, f).

These are two different behaviours, and shipping one of them as the universal rule would surprise the operator in the other case.

What Qootna does

The freight resolver emits an optional flag fuelIndexed: boolean alongside the fuel-adjustment value. When fuelIndexed === true, the engine applies f raw — positive or negative. When fuelIndexed is false or undefined, the engine clamps with max(0, fRaw).

The trace step records both the raw f and the applied value, so the operator can see in the audit panel whether the clamp fired. The line renders the applied value on the freight breakdown; the trace shows the underlying mechanic.

Default behaviour today is clamp on. The freight resolver doesn't yet have a lane-level metadata field that says "this lane is fuel-indexed". When the contract metadata lands (admin row on FreightFallbackConfig, or carrier-contracts table), the flag flows through and indexed lanes light up automatically.

Why this matters for planning

A buyer running scenarios in a falling-Brent environment will see zero freight shrinkage by default. That's the conservative, contract-realistic answer for most lanes today. When the buyer marks a specific lane as fuel-indexed (or when a contract row says so), the negative pass-through becomes visible and the operator can take it.

A surprise the other way — engine quietly shrinks freight because Brent dropped, and the carrier invoice comes in at the contracted rate — would burn the operator. We chose the conservative default deliberately.

What the trace looks like

The trace step records:

fuelAdjustment:
  f_raw         = -8.4    // negative BAF
  fuelIndexed   = false
  applied       = 0       // clamped
  formula       = max(0, f_raw)

When indexed:

fuelAdjustment:
  f_raw         = -8.4
  fuelIndexed   = true
  applied       = -8.4    // passed through
  formula       = f_raw

The operator sees both the raw signal and the engine's interpretation. The audit panel can defend the chosen behaviour. The line renders the applied number on the freight breakdown.

Coming next

When a contract metadata source lands — whether that's a carrier API field or an admin-managed contracts table — the fuelIndexed flag becomes a per-lane property rather than a default-off. Until then, every quote is conservative by default and the operator can override at the audit / negotiation stage.

The clamp isn't a hack. It's a deliberate default. The flag isn't ready yet, but the engine is ready for it.