KIRBY CORP

Marine transportation inland and coastal services are conducted under term or spot contracts for customers with whom the Company has traditionally had long-standing relationships. Typically, term contracts range from one to three years, some of which have renewal options. The majority of the marine transportation contracts with its customers by revenue are for terms of one year. Most have been customers of KMT for many years and management anticipates continued relationships; however, there is no assurance that any individual contract will be renewed.

The Company enters into agreements with its customers to transport cargo from a designated origin to a designated destination at a set rate (affreightment) or at a daily rate (time charter). The rate may or may not include escalation provisions to recover changes in specific costs such as fuel. Time charter or contracts of affreightment of one year or greater are considered term contract revenues and agreements of less than a year are included in spot contract revenues. Time charters, which insulate the Company from revenue fluctuations caused by weather and navigational delays and temporary market declines, represented approximately 63% of the marine transportation’s inland revenues under term contracts during 2023, and 58% of the revenue under term contracts during 2022 and 2021. Spot contracts typically involve an agreement with a customer to move cargo from a specific origin to a designated destination for a rate negotiated at the time the cargo movement takes place. Spot contract rates are at the current “market” rate and are subject to market volatility.

The Company typically maintains a higher mix of term contracts to spot contracts to provide the Company with a reasonably predictable revenue stream while maintaining spot market exposure to take advantage of new business opportunities and customers’ peak demands. During 2021, approximately 65% of inland marine transportation revenues were under term contracts and 35% were under spot contracts. During both 2022 and 2023, approximately 60% of inland marine transportation revenues were under term contracts and 40% were under spot contracts. Coastal time charters represented approximately 85% of the marine transportation’s coastal revenues under term contracts in 2021 and approximately 90% of coastal revenues under term contracts in 2022 and 2023.

No single customer of KMT accounted for 10% or more of the Company’s revenues in 2023, 2022, or 2021.