To Our Valued Customers:
Tropical Shipping president and CEO Tim Martin testified, in Washington DC, on Monday before the US Trade Representative (USTR) that the proposed tariffs would severely affect American-owned shipping companies as well as US exporters and Caribbean businesses that ship with Tropical.
The proposed tariffs include a flat $1 million port fee on Chinese-built vessels entering US ports. “The US shipping industry serving the Caribbean cannot absorb the additional costs of the proposed port fees, which would have significant economic consequences,” Martin testified. “Instead of strengthening American competitiveness, these port fees would push American-owned carriers like Tropical out of business.”
Tropical Shipping operates out of the Port of Palm Beach, Fla., and nine of its 19 vessels were built in China up to 25 years ago. Martin asked the USTR to exempt American-owned and headquartered vessel operators from proposed fees and to apply the tariffs on future ships built in China, but not on fleets that are already in service.
“I urge this committee to consider exemptions or policy adjustments that ensure American-owned shipping companies are not unfairly penalized for decisions made years before these tariffs, thereby ensuring a fair and equitable policy,” Martin testified.
Tropical transports about half of all goods imported to the Caribbean, and Central and South America – poultry, agriculture products, groceries, building materials, medicine, and hurricane relief supplies. The proposed fees would force Tropical Shipping to double its freight rates, causing its Caribbean customers to buy from outside the US at a higher cost.
Additional impacts of the tariffs:
- The Proposed Actions will create a multiplier effect across the American shipping industry and the Caribbean, including American businesses that export to the Caribbean and the US supply chain as well as our Caribbean counterparts and consumers buying the products we ship.
- The average vessel serving the Caribbean region is 1,100 TEUs. If the fees in the Proposed Action are applied to these smaller vessels, we would have to double our freight rates, with an average increase of $2,500 USD per 40′ container. An increase of this magnitude would be catastrophic for American exporters and Caribbean consumers.
- As a comparison, applying the proposed $1,000,000 fee to a vessel that calls on a single US port directly from China carrying 16,000 TEUs would increase the cost per 40′ container by only $125 USD.
- Tropical expects the unintended consequence will be that America’s third border, the Caribbean Basin, will become China’s new Red River—a trading route dominated by Chinese carriers and vessels transporting goods from China and other supply sources outside the United States.
Tropical Shipping’s role in the Caribbean region:
- The Caribbean market depends on our on-time, reliable shipping and our 60 years of expertise in the market.
- Tropical Shipping supports each of the 30 port communities we serve through donations to education and youth development programs. In 2024, we donated more than $500,000 USD to organizations throughout the Caribbean and Central and South America.
- American-owned carriers like Tropical are the leading ocean carriers in the Caribbean, unlike most international maritime carriers, which are not American-owned.
- Tropical’s 19 vessels were built to serve shallow draft ports in the Caribbean. Nine of them were built in China between 8 and 25 years ago. During this time, Tropical had little to no practical opportunity to build new vessels in the US.
- Tropical’s vessels are much smaller than the 16,000 (TEUs) capacity vessels most international maritime carriers use. Our fleet of vessels range in size from 150 to 1,100 TEUs.
- Tropical vessels have participated in the US Southern Command’s “Tradewinds” exercises, which have been described as “key to maintaining regional security, safety, and prosperity throughout the Caribbean Basin.”
Tropical Shipping is headquartered in Riviera Beach, Florida, and has served the Caribbean market since 1963. Tropical’s transportation services include refrigerated, dry, Full-Container-Load (FCL), Less-than-Container-Load (LCL), small package, consolidation, inland transportation, and global logistics services.
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