The coming year could bring a historic labor agreement to the L.A. waterfront, where employers and dockworkers are in the early stages of developing a compromise solution to modernize the ports.

Although an agreement is far from certain, and no formal negotiations are scheduled as of yet, there is a cautious sense of optimism that the time to strike a deal is approaching.

Last week, executives of the Pacific Maritime Association, which represents waterfront employers, met with leaders of the International Longshore and Warehouse Union to explain what kind of technological changes they are seeking at the ports and what job security they can offer in exchange.

“It was a good meeting,” said Joe Miniace, president and chief executive of the PMA. “There were 50 representatives of the union at the meeting, and they were very interested in our ideas. They asked a lot of questions.”

The staggering jump in container cargo at the ports of Long Beach and Los Angeles, and the resulting gridlock at terminals, where hundreds of trucks often wait in line to pick up their loads, has brought home the necessity to install new technology at terminals sooner rather than later.

As a result, Miniace has been urging Jim Spinosa, president of the ILWU, to reopen the current labor contract and to negotiate one that would accommodate the need for far-reaching automation and computerization of the terminals.

Spinosa, to the surprise of many people, has agreed to sit down with the PMA and hear what they have to say. Still, this is the waterfront, where things move as fast as the union wants them to, and the ILWU is more than a little cautious about rushing into any kind of agreement.

“Union leaders need to ask for the blessing of the (membership caucus) to start talks with the PMA,” said David Adam, executive vice president with Marine Terminal Corp. “They are not authorized to negotiate anything at this point, and the big question for members is ‘what am I going to get out of it’ if they renegotiate the contract.”

Movement toward modernization

A caucus meeting could occur sometime between January and March. If the union membership gives permission to union leaders to start labor talks with the PMA, negotiations could get under way by next summer.

The rank-and-file has in the past been more than a little hostile toward allowing modernization of the terminals. Just two years ago, Local 13 in Wilmington voted against replacing a chalkboard in the dispatch hall with a computerized system, even though the ILWU leadership had agreed to the change.

Nevertheless, there is a cautious sense of optimism among cargo carriers that the circumstances for a breakthrough deal are improving, in particular because both the union and the PMA went through significant changes at the top that put both parties in a better position to tackle the tough issues.

Newly elected ILWU president Spinosa is regarded as an extremely savvy and tough negotiator in the industry, but that might give him just the credibility with the membership that is needed to negotiate what might be the most important labor contract on the waterfront since containerization started in the early 1960s.

In addition, the PMA recently went through a reorganization of its board of directors to better reflect the growing importance of overseas-based ocean carriers in the trans-Pacific trade. The new board will have more authority and, if necessary, might be able to make generous concessions to the union in exchange for a commitment to modernization.

“There’s been some new thinking on both the labor side and on the side of the PMA,” said Bob Kleist, an advisor with Evergreen America Corp. “At the same time, nothing will occur just because some people believe it’s a good idea.”

Job guarantees

The PMA is essentially guaranteeing employment of the current longshore workforce in exchange for introduction of new technology that would greatly improve the efficiency of the terminals but also eliminate high-paying union jobs. The ILWU is seeking jurisdiction over new jobs that are created as a result of any modernization.

Although the possible negotiations are expected to be difficult and long, there is also a growing sense that the union cannot stop the changes from coming.

“Things are happening in the industry worldwide and they are moving more rapidly than ever before,” said Kleist. “The thinking of the ILWU leadership seems to be that they are happy to see the steamship industry make progress, but they want to be taken along.”

The new technology sought by the PMA includes things like automated dispatching systems and are not exactly revolutionary. They seem relatively modest compared to the highly automated and robotized ports of Hong Kong and Rotterdam. But as local ports run out of space to expand, and the volume of trade with Asia continues to grow rapidly, it might be a matter of time before more dramatic technological changes will be introduced here, too.

“The technology is here and, if the ports are going to stay competitive, it’s going to have to happen,” said John Dionisio, chief executive of DMJM + Harris. “This can be done without the loss of employment, however. The ports are going to be flooded with work in the coming years and, once the Alameda Corridor is up and running, the biggest bottleneck will be how to get containers out of the terminals.”