The Company assesses risk associated with fluctuating future freight rates and, when appropriate, hedges identified economic risk with appropriate derivative instruments, specifically forward freight agreements (FFAs). These economic hedges do not usually qualify for hedge accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis.

The Company continuously monitors the market volatility associated with bunker prices and seeks to reduce the risk of such volatility through a bunker hedging program. The Company enters into fuel swap contracts that are not designated for hedge accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis.

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

The estimated fair values of the Company’s forward freight agreements and fuel swap contracts are based on market prices obtained from an independent third-party valuation specialist based on published indices. Such quotes represent the estimated amounts the Company would receive or pay to terminate the contracts. The interest rate caps contracts are valued using analysis obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets.

The following table summarizes assets and liabilities measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025:


	Asset Derivative					Liability Derivative
Derivative instruments	Balance Sheet Location	03/31/2026		12/31/2025		Balance Sheet Location	03/31/2026		12/31/2025
Margin accounts (1)	Other current assets	$	4,201	$	572	Other current liabilities	$	—	$	—
Forward freight agreements (2)	Other current assets	$	170	$	177	Other current liabilities	$	—	$	—
Fuel swap contracts (2)	Other current assets	$	5,556	$	—	Other current liabilities			$	1,189
Interest rate cap (2)	Other current assets	$	216	$	347	Other current liabilities	$	—	$	—

The three levels of the fair value hierarchy established by ASC 820, Fair Value Measurements and Disclosures, in order of priority are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 fair value measurements include cash, money-market accounts and restricted cash accounts.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s floating rate debt approximate fair value as the applicable interest rates are variable and reflective of current market rates.

The following table presents the effect of our derivative financial instruments on the consolidated statements of operations for the three and three months ended March 31, 2026 and 2025:


	Unrealized gain (loss) on derivative instruments
	Three Months Ended
Derivative instruments	03/31/2026		3/31/2025
Forward freight agreements	$	(7)	$	422
Fuel Swap Contracts	6,744		297
Interest rate cap	(131)		(536)
Total gain	$	6,606	$	184