Attention Valued Customers:
In a recent testimony before the U.S. Trade Representative (USTR) in Washington, D.C., the president and CEO of Tropical Shipping expressed significant concerns regarding proposed tariffs that could adversely impact American shipping companies, U.S. exporters, and Caribbean businesses utilizing their services.
The proposed tariffs include a substantial $1 million port fee on vessels from China entering U.S. ports. “The U.S. shipping industry serving the Caribbean cannot absorb these additional costs, which would lead to severe economic repercussions,” he stated. “Rather than enhancing American competitiveness, these fees could ultimately result in the collapse of American-owned carriers like ours.”
Operating from the Port of Palm Beach, Florida, nine of Tropical Shipping’s 19 vessels were constructed in China up to 25 years ago. The CEO urged the USTR to exempt existing American-owned vessel operators from these fees and to limit tariffs to future ships built in China, emphasizing fairness in policy adjustments.
“I implore this committee to consider exemptions that prevent American-owned shipping companies from facing penalties for decisions made long before these tariffs were proposed,” he added.
Tropical Shipping plays a vital role in transporting approximately half of all goods imported to the Caribbean, including poultry, agricultural products, groceries, building materials, medicine, and hurricane relief supplies. The proposed fees could lead to a doubling of freight rates, compelling Caribbean customers to source goods from outside the U.S. at higher prices.
Potential Consequences of the Proposed Tariffs:
- The proposed tariffs could trigger a ripple effect across the American shipping industry and the Caribbean, impacting U.S. businesses that export to the region and affecting consumers reliant on these imports.
- The average vessel operating in the Caribbean has a capacity of around 1,100 TEUs. If the proposed fees are imposed, freight rates could double, resulting in an average increase of $2,500 per 40′ container, which would be devastating for American exporters and Caribbean consumers.
- By contrast, applying the proposed $1,000,000 fee to a larger vessel carrying 16,000 TEUs from China would only raise costs per 40′ container by approximately $125.
- Tropical foresees that if these tariffs proceed, the Caribbean could evolve into a trading route dominated by Chinese carriers, shifting away American influence and capacity.
Significance of Tropical Shipping in the Caribbean:
- Our reliable and timely shipping services, backed by 60 years of expertise, are essential to the Caribbean market.
- Tropical Shipping actively engages with the 30 port communities we serve, contributing over $500,000 in 2024 to educational and youth development initiatives across the Caribbean and Central and South America.
- As one of the leading American-owned ocean carriers, Tropical stands apart from most international maritime companies, which are not U.S.-owned.
- All 19 Tropical vessels are tailored for the shallow draft ports in the Caribbean, with nine built in China between 8 and 25 years ago, during a time when U.S. construction options were limited.
- Our fleet, ranging from 150 to 1,100 TEUs, is significantly smaller than the 16,000 TEUs vessels used by most international carriers.
- Tropical vessels have also actively participated in U.S. Southern Command’s initiatives aimed at fostering regional security and economic stability within the Caribbean Basin.
Tropical Shipping, headquartered in Riviera Beach, Florida, has been a trusted provider in the Caribbean market since 1963, offering a comprehensive range of transportation services, including refrigerated and dry cargo transport, Full-Container-Load (FCL), Less-than-Container-Load (LCL), small package services, consolidation, inland transportation, and global logistics solutions.
