The Port of Palm Beach and ocean carrier Tropical Shipping, its largest tenant, have agreed to a new 10-year contract that will provide an additional $10 million in net income for the South Florida port.
The Port of Palm Beach and ocean carrier Tropical Shipping, its largest tenant, have agreed to a new 10-year contract, the South Florida port said in a statement.
Under the new agreement, which includes four 5-year extension options, Tropical will increase its minimum tonnage guarantee by 170,000 tons and provide a $500,000 reservation fee and another $500,000 capital contribution.
The contract extension will provide an additional $10 million in net income and more than $12 million in cash flow for the port over the course of the agreement.
In addition, the deal includes a formal agreement to demolish Tropical’s former headquarters at the port and redevelop the land and adjacent parking lot to create an additional three acres of terminal space. That project is expected to be completed between March and September of 2020.
Tropical accounts for about one-third of the port’s net revenue, according to the port, which handled 260,000 TEUs and 2.5 million tons of cargo in fiscal year 2016.
“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, said of the deal. “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.”
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