By Paul Berger

Unionized dockworkers and employers returned to the bargaining table with both sides still divided over the core issue of automation at the ports and barely more than a week to go before a potential strike at gateways from Maine to Texas.

Leaders of the International Longshoremen's Association, which represents tens of thousands of dockworkers across the Atlantic and Gulf coasts, and industry officials began negotiations Tuesday in New Jersey for the first of three days of scheduled talks, according to people familiar with the discussions.

Representatives for the dockworkers and employers have been meeting informally in recent days in an effort to lay down a framework for a possible accord, the people said.

Hanging over the negotiations are deep disagreements over the use of automation on the docks and the threat of a repeat of a three-day strike that shut down major ports including New York-New Jersey, Houston and Georgia's Port of Savannah in October.

That walkout ended after Biden administration officials intervened and helped broker a tentative deal that raised the base hourly rate for ILA port workers to $63 from $39 over six years, an increase of 62%.

The agreement extended the current labor contract through Jan. 15, leaving the two sides to close a divide over the use of technology that union leaders say threatens jobs.

Port employers and ocean shipping companies say they agreed to a large wage increase on the understanding that the union would consent to gains in productivity that could come with more automation. But union leaders have dug in against the use of semi-autonomous cranes and other technology that employers say makes cargo handling safer and more efficient.

Two ports covered by the ILA contract already use semi-autonomous cranes to stack and organize containers for pickup by truckers. One crane operator using the technology can oversee the work of several cranes at once.

People familiar with the talks say the ILA wants to require that employers hire more people for each crane in operation. That would dramatically increase operating costs for ports like the Port of Virginia, which has 116 automated stacking cranes and is expecting to add another 36 of the machines in the next few years.

A spokesman for the Virginia port declined to comment.

The people familiar with the talks say the ILA is also trying to increase staffing for future uses of automation. "We are not against paying people for doing good work," said a shipping industry official familiar with the talks. "We're just not in the business of hiring people who are going to add no value but purely add cost."

A spokesman for the ILA declined to comment. The head of the union, Harold Daggett, said last month that the ILA supports technology as long as it "promotes efficiency without replacing the critical role of a human performing that task."

President-elect Donald Trump recently threw his support behind the union. Following a meeting with Daggett in December, Trump said foreign-based ocean shipping companies, which control the employer group leading the negotiations, should invest in wages instead of machinery.

If the two sides cannot reach a deal by the contract's expiration, dockworkers could walk out as soon as midnight the night of Jan. 15.

A strike in January wouldn't be as disruptive to the economy as the October walkout, which came at the busiest time of year in the shipping calendar when retailers are stocking up for the holidays. But it would undercut retailers and manufacturers that depend on consistent replenishment of finished goods, parts and raw materials, especially companies that focus on seasonal items.

Some importers have been pulling forward orders and rerouting goods to West Coast ports in anticipation of a potential walkout. The Retail Industry Leaders Association, which represents big-box stores such as Target and Home Depot, said its members are implementing contingency plans in case of port disruptions.

"The longer a work stoppage goes on, the more consumers will feel the ripple effects," the group said.

Write to Paul Berger at paul.berger@wsj.com

(END) Dow Jones Newswires

January 07, 2025 10:58 ET (15:58 GMT)

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