For U.S. importers and exporters, it’s a nightmare scenario: The nation’s two busiest seaports, Los Angeles and Long Beach, crippled by labor strife, with thousands of dockworkers refusing to unload ships.

A strike almost certainly would lead shippers to divert cargo from L.A. and Long Beach to less troubled ports, robbing the region of both jobs and tax revenues.

But as the International Longshore and Warehouse Union and the West Coast’s container shipping lines prepare to negotiate a new, three-year contract, that grim scenario is a distinct possibility.

“There is going to be a strike,” predicted Theodore Prince, an international trade consultant and former chief operating officer of the shipping company K-Line America Inc.

Prince, in fact, is advising his clients to seek alternatives to L.A. and Long Beach such as ports in Canada, Mexico, and all-water routes from Asia to the East Coast in anticipation of widespread slowdowns and disruptions once labor negotiations begin in earnest this spring and summer.

Los Angeles and Long Beach, Prince said, are “too expensive, and you can’t get the reliability or the productivity you need.”

Relations between the ILWU and the Pacific Maritime Association, which represents the approximately 90 shipping concerns that call at seaports up and down the West Coast, have been tense since their last deal was inked in 1996. That contract does not expire until July 1, 1999. But both sides are jockeying in anticipation of the new contract talks, which are scheduled to begin in May.

The stakes are potentially enormous. A quarter of the nation’s container cargo is handled by the ports of Los Angeles and Long Beach, and an estimated 400,000 people in Southern California are directly employed in the region’s international trade sector.

“If you got into a bitter strike that dragged out, it would not be a pretty sight,” said Jack Kyser, chief economist with the Economic Development Corp. of L.A. County. “A bitter dispute that lasted a couple of months could knock (the region) into a recession. This has national economic implications.”

Both the PMA and the ILWU are aware of those implications, and both sides agree that a strike is in no one’s best interest. The problem is, that seems to be the only thing they agree on.

The current three-year contract is the most costly ever negotiated in the industry. The average dockworker at the West Coast ports last year earned $96,865, with highly skilled crane operators and marine clerks pulling in as much as $113,000.

But waterfront employers complain that worker efficiency has not kept pace with wage increases. Productivity has plummeted over the course of the current contract, employers say, falling some 20 percent over the last several years, according to Joseph N. Miniace, the PMA’s president and chief executive.

“We are spending a lot more man-hours to move the same amount of containers,” Miniace said.

Of particular concern, Miniace added, are illegal side deals struck between dockworkers and shipping terminals, in which operators agree to pay overtime rates during normal weekday hours, or pay a worker for hours not actually worked. In many cases, terminal operators have little choice but to agree to such deals or risk costly delays in having their ships unloaded, shipping officials say.

“Having a ship stand around costs several thousand dollars an hour,” said one longtime shipping executive. “If you have a productive employee, you are much better off. You hire the guy that does the job best.”

Employers also complain of illegal work slowdowns and stoppages by the dockworkers. There have been more than 150 such stoppages since 1996, according to Miniace, costing PMA members some $160 million in delays.

ILWU spokesman Steve Stallone said that number is grossly exaggerated and denied that the work actions were illegal. Instead, he said, the current contract gives union members the right to honor picket lines and to cease working whenever a worker feels his health or safety is at risk.

“They’re calling that illegal, but it’s in the contract,” Stallone said.

Stallone also disputed the PMA’s claim about productivity problems, attributing any decline to such issues as last year’s transportation meltdown or the current trade imbalance. Both created a severe backlog of cargo containers, making the dockworkers’ jobs considerably more complicated and both are far beyond the union’s control.

The ILWU is scheduled to meet in March to draw up its bargaining platform. Meanwhile, the union already has begun raising a $1 million strike fund and advised its members to begin putting personal funds aside in the event a walkout does occur, Stallone said.

“Nobody wants a strike,” he said. “But we’ve got to protect our situation. And we won’t be caught unprepared.”

Meanwhile, faced with diminishing profit margins due to intense competition and the Asian economic crisis, shipping companies are preparing for a tough series of negotiations.

“The steamship industry is being pushed into an economic condition where it is going to have to stand up to the unions,” the shipping executive said, adding that a strike “certainly is a possibility.”

Members of the local trade and transportation community are watching it all with a mounting sense of unease.

“If we can’t work out a better relationship between labor and management, it is going to cost all of us,” said Don Wylie, director of trade and maritime services at the Port of Long Beach. “The worst threat to our market share is unreliability.”

Adding to the problem is a split in the ILWU between the longshoremen’s leadership in San Francisco and the powerful local leaders in Los Angeles and Long Beach, who strongly opposed the current contract and unsuccessfully sought to unseat ILWU International President Brian McWilliams last year.

There are indications that the union has patched up its differences. At the union’s recent caucus meeting in San Francisco, for example, McWilliams appointed his chief rival, Vice President James Spinosa, as chairman of the union’s Coast Committee, which runs day-to-day waterfront affairs. The move positions Spinosa, who has a reputation as one of the ILWU’s most hard-line leaders, to become the union’s point person in the upcoming negotiations.

“We are presenting a united face,” Stallone said.

There are signs that the PMA and the ILWU can solve their differences without conflict. The association, for example, last week agreed to drop pending litigation over work stoppages that occurred in Oakland in 1997. The two groups also have been holding weekly meetings to discuss various workplace issues, Miniace said.

“That’s a real positive sign,” he said.

The last West Coast dockworker strike occurred in 1971, when picketing longshoremen shut down the ports for more than three months. The walkout ended when President Nixon, invoking the Taft-Hartley Act, ordered the striking employees to return to work.

By the time the strike was over, there were more than 100 ships waiting at the harbor to be unloaded, recalled Jay Winter, executive secretary of the Foreign Trade Association, who was running a local shipping agency at the time.

“It was a costly strike for the union, and for the ship-owners,” Winter said. “It was a mess for everyone.”