The Board of Commissioners for the Port of Palm Beach (FL) District recently approved a new 10-year contract with Tropical Shipping, its largest tenant. Included in the agreement are options for both parties to extend the partnership with four five-year terms.
Tropical accounts for about one-third of the port’s overall net revenue, handling 1,750 vessel calls, 260,000 TEUs, and 2.5 million tons of cargo in fiscal year 2016.
As Tropical plans to add 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 $500,000 capital contribution from Tropical. By 2027, wharfage rates, covering the handling of shipments at the port, will have risen by 11.5%. During the 10-year agreement, the port will realize roughly $10 million in additional net income and more than $12 million in cash flow.
One of Tropical’s primary goals was to acquire more land to handle refrigerated container units. These units are used 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 three acres of terminal space. The MOB project is estimated to be completed between March and September 2020.
Tropical operates 15 vessels, including the 491-foot Tropic Carib and Tropic Unity, both of which dock regularly at the Port of Palm Beach.
Go to www.portofpalmbeach.com or www.tropical.com for further information.