Revenue

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Voyage charters

In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or “dead” freight. The voyage contract generally has standard payment terms of 95% freight paid within three days after completion of loading. The voyage charter party generally has a “demurrage” or “despatch” clause. As per this clause, the charterer reimburses the Company for any potential delays exceeding the allowed laytime at the ports visited which is recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime known as despatch, resulting in a reduction in revenue.

The voyage contracts are considered service contracts which fall under the provisions of ASC 606, Revenue Recognition, because the Company, as the shipowner, retains the control over the operations of the vessel such as directing the routes taken or the vessel speed. The voyage contracts generally have variable consideration in the form of demurrage or despatch. The amount of revenue earned as demurrage, net of despatch incurred, for the years ended December 31, 2022, 2021 and 2020 was $33.7 million, $20.7 million and $6.3 million, respectively.

The following table shows the revenues earned from time charters and voyage charters for the years ended December 31, 2022, 2021 and 2020:

        

	For the Years Ended
	December 31, 2022		December 31, 2021		December 31, 2020
Time charters(1)	$	343,084	$	299,614	$	105,028
Voyage charters	376,763		294,924		170,106
	$	719,847	$	594,538	$	275,134

(1)See Note 11, Leases, for a description of revenues earned from time charters.

Contract costs

In a voyage charter contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. Costs directly related to a contract that are incurred prior to commencement of loading cargo, primarily bunkers, are recognized as an asset and are expensed on a straight-line basis as the related performance obligation is satisfied. As of December 31, 2022 and 2021, the Company recorded $0.5 million and $0.7 million, respectively, of contract fulfillment costs in Other current assets in the Consolidated Balance Sheets.