LABOR—Port Union May Be Ready to Deal Over Automation

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With mountains of cargo landing every day at the ports of L.A. and Long Beach, terminal operators are getting increasingly desperate to install new technologies to speed the cargo-handling process.

There is only one thing standing in their way dockworkers who fear the move would cost them their jobs.

Now, in what seems like a remarkable change of attitude, James Spinosa, president of the International Longshore and Warehouse Union, has said the union might be willing to reopen the three-year labor contract it signed last year with the Pacific Maritime Association, which represents waterfront employers.

Union officials have also indicated a willingness to take a closer look at what could be done to make the local ports more efficient.

“(The union) has been very smart, and they know exactly how fast they have to move,” said one insider. “Spinosa knows there are going to be changes in the way the terminals are operated, and that he can’t stop these from happening. But he can and will try to control the pace at which they are made, in order to get the best possible deal for the union members.”

Spinosa made his comments about automation in a speech to a conference of freight forwarders and custom brokers last week. They come several months after Joseph Miniace, the PMA’s chief executive, began pushing to renegotiate the contract, citing concerns that West Coast ports might lose their competitive edge if there are no substantial improvements in productivity at the terminals.

Spinosa’s new attitude doesn’t mean he shares those concerns about competition. It’s much more likely that the hard-nosed leader of what is arguably the most powerful union on the West Coast believes he can extract more concessions from the PMA now than he was able to during last year’s contract negotiations.

“The PMA is prepared to make very substantial concessions to the union,” said one industry insider familiar with the confidential talks between the two sides. “Next year is expected to be a most difficult year in the ports because there is no space left at this point, and the volume of imports continues to increase. The PMA is willing to guarantee lifetime employment, and to hire more casual workers as registered longshoremen, just to accelerate the implementation of technology they need to handle the growth.”

So far this year, the number of containers passing through the port of L.A. is up more than 30 percent over the same period last year. In Long Beach, that number is a more modest 6 percent.

With hundreds of thousands more 40-foot containers to handle, congestion at the terminals and costly delays moving the cargo off the docks have become all too routine.

Shipping lines and terminal operators argue that the only way to significantly speed the flow of that cargo is to turn to technological improvements like automating gates where trucks arrive to pick up containers. Those gates are now staffed by union workers who process paperwork by hand. Shippers would also like to install completely computerized data systems to track cargo as it is moved from point to point.

Those changes are bound to eliminate some longshore jobs but could also create new ones. Aside from preserving existing jobs, a key concern of the union is extending its jurisdiction over newly created positions. At the same time, terminal operators will want to minimize the number of ILWU workers it has to pay, since dockworkers now earn an average of more than $100,000 a year.

Industry studies have shown that installing improved technologies at the terminals would improve efficiency by 30 percent and extend the life cycle of the facilities by 20 years.

Although large-scale infrastructure projects at both L.A. and Long Beach ports are expected to alleviate the space constraints within two years, future growth will be contingent upon implementing new technologies, according to the PMA.

During last year’s contract negotiations, the ILWU did not want to tackle the question of new technologies because of the limited time available to work through details of a PMA contract proposal. Instead, both sides agreed to set up a Joint Technology and Job Security Committee to further explore the use of technologies before the current contract expires in July 2002.

Miniace was not available for comment last week. But the perception in the industry has been that the PMA, being overly eager to secure labor peace on the waterfront, caved in too easily last year by not demanding a firmer commitment from the ILWU to allow more technologies to be installed.

The committee, however, has met just once, and that is not frequent enough for the terminal operators looking for improvements in the near future.

However, the ILWU vowed that it will not be rushed and at least at this point, the union appears to be in the driver’s seat.

“The union is educating itself about the changes that the PMA is seeking,” said ILWU’s spokesman Steve Stallone. “We recognize that we’re finding ourselves in a time of change, but our main concern will be to save the jobs of our members.”

Stallone downplayed the perception that the union has the PMA over a barrel.

“If that were true, we’d already have a deal,” he said. “We don’t know what is in it for us until we sit down to negotiate.”

Nobody in the industry expects a quick deal to be cut, or far-reaching automation to be installed anytime soon. In fact, many point to the Modernization and Mechanization Agreement of 1961, which introduced containerization of cargo on the West Coast. That agreement took years to negotiate and implement, and required the formidable personality of the legendary Harry Bridges to lead the ILWU into a new era.

Some industry observers have questioned whether Spinosa, who was elected earlier this year, has the commitment and ability to take the union into the uncharted territory of new technologies at the ports.

But others are becoming cautiously optimistic that the ILWU, and particularly the more pragmatic members in L.A. and Long Beach, might be coming to terms with the realization that port automation is not going to go away, and that the union’s future will depend on its ability to accommodate the changes.

“Spinosa is a bright guy and he’s looking toward the future,” said one local shipping line official. “It’s going to be a slow and deliberate process, but there’s going to be changes. The union agreed last year to our demand for automated dispatching of longshore labor, and it’s taken them a year to start implementing it. We hope that by next year we’ll have it fully automated.”

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