Shipping Service: Palm Beach

Port of Palm Beach Signs 10-Year Contract with Tropical Shipping

 
Tropical Shipping operations at Palm Beach
Photo/Port of Palm Beach

The Board of Commissioners for the Port of Palm Beach District voted April 26 its approval of a new 10-year contract with Tropical Shipping. The agreement includes options to extend the partnership for up to four 5-year terms. A port tenant since 1963, Tropical now generates about a third of its net income.

As Tropical will be adding six new vessels to its fleet in 2018, the contract will raise the minimum tonnage guarantee by 170,000 tons. The port will also receive a $500,000 reservation fee and a $500,000 capital contribution from Tropical. By 2027, wharfage rates will have increased by 11.5 percent.  Over the course of the 10-year agreement, the port will realize approximately $10 million in additional net income while cash flow will be more than $12 million.  

One of Tropical’s primary goals was to acquire more land to handle refrigerated container units. These units are utilized to transport temperature-controlled cargoes such as fruits, meat, fish, seafood, vegetables, dairy products, and non-food products such as flowers, pharmaceuticals and film.

The agreement calls for engineering design plans to commence in May 2017 for the demolition of the Maritime Office Building (MOB), which was Tropical’s former headquarters at the port. The land vacated by the MOB demolition and the adjacent parking lot will create 3 acres of terminal space. The MOB project is estimated to be completed between March and September 2020.  

"I’m very pleased with the positive outcome of this newly negotiated long-term contract with our largest tenant, Tropical Shipping," noted Port District Commission Chairman Blair J. Ciklin. "The board continues to take action to sustain the growth we have experienced in recent years, and we’re excited that Tropical Shipping will be onboard to become a large part of our future growth."