The Board of Commissioners for the Port of Palm Beach District has approved a new 10-year contract with its largest tenant, Tropical Shipping.
The agreement includes options for both parties to extend the partnership with four 5-year terms.
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 USD 500,000 reservation fee and a USD 500,000 capital contribution from Tropical, as stipulated under the deal.
As informed, one of Tropical’s primary goals was to acquire more land to handle refrigerated container units. 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 MOB project is estimated to be completed between March and September 2020.
The land vacated by the MOB demolition and the adjacent parking lot will create 3 acres of terminal space.
“I’m very pleased with the positive outcome of this newly negotiated long-term contract with our largest tenant, Tropical Shipping,” Blair J. Ciklin, Chairman of the Board of Commissioners for the Port of Palm Beach District, noted.
“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,” J. Ciklin added.
Operating 15 vessels, the shipping company accounts for approximately one-third of the port’s overall net revenue, with the Port of Palm Beach having handled 1,750 vessel calls, 260,000 TEUs, and 2.5 million tons of cargo in FY 2016.