Port owners and ILA union secretly discussed automation ahead of potential strike.

• On Sunday, a secret meeting took place between representatives of the International Longshoremen's Association and the USMX port ownership group to address the issue of port automation that must be resolved by Jan. 15 to prevent a new East and Gulf Coast ports strike.
• The document generated from the conference and examined by CNBC suggests that ports are open to integrating any new technology with new employment opportunities, but it may also pose new risks to the agreement, with increased labor expenses jeopardizing the terms agreed upon in October for a 62% wage increase for union workers.
• The resumption of formal talks on Tuesday is uncertain as it is still unclear if the entire port ownership group will back the new automation language.

On Sunday, a secret meeting took place between key members of the International Longshoremen's Association and the United States Maritime Alliance to help the dockworkers' union and ports ownership find common ground on the contentious issue of automation and semi-automation. The resulting document emphasizes the importance of creating new human jobs to complement any new port technology.

The eight-hour meeting took place before the resumption of formal bargaining, with a January 15 deadline to prevent a new strike by dockworkers. Sources close to the negotiations, who requested anonymity due to the sensitive nature of the discussions, have revealed that language on automation was drafted to assist the full bargaining committee review process scheduled for Tuesday.

The language used in the sentence could potentially result in additional labor expenses and increased risks in achieving a comprehensive agreement on wages and automation.

The meeting was attended by executives from port terminals that already use the technology in question, including RMG cranes at container terminals in Bayonne, New Jersey, and the NIT Terminal in Virginia. Among the executives present were Paul Demaria, CEO of USMX; Kevin Price, president of Gateway Terminals; Joe Ruddy, chief operations officer of the Port of Virginia; John Atkins, president of GCT USA; and Anthony Ray, executive vice president of operations at Maher Terminals. Additionally, the union was represented by ILA president Harold Daggett and his son Dennis, who is executive vice president of the ILA, as well as Virgil Moldonado, president of the NY/NJ chapter of the ILA 1588.

The ILA has the option to include union workers in the future to enhance any new technology, as per the agreement reviewed by CNBC. Both parties are committed to exploring and utilizing all technology that can improve an operator's efficiency and productivity.

Modern crane control systems have been successfully utilized by skilled human operators to handle port tasks that require precision, with the aid of cameras, alignment guides, anti-sway technology, and motion-dampening controls.

Semi-automated rail-mounted gantry crane operations involve humans controlling complex tasks while automation handles repetitive motions.

Rewritten: Union workers manually operate cranes without automation, but loading positioning sensors, obstacle detection systems, and real-time feedback systems help them achieve precision comparable to automation.

Despite the proposed language on automation suggesting that the USMX is willing to address some union concerns over jobs, port sources indicate that crucial details remain to be negotiated.

New labor costs that do not accurately reflect port needs and economics are a concern for sources within the USMX, as they believe it will ultimately lead to increased supply chain costs and impact consumers.

"What are deemed as necessary jobs?" questioned a terminal operator. "Is the job truly necessary or is it a job being created for the sake of adding a worker?"

"The terminal operator stated that the additional jobs are funded by raising the cost of services paid by the shipper, which is then transferred to the consumer. This is the definition of inflation."

The ILA declined to comment on the meeting.

The USMX bargaining team may not agree to document language on automation, potentially leading to another strike.

"A USMX member stated that the country is at a crossroads. If an agreement cannot be reached and a strike occurs, both sides will take a risk to see if a better deal can be negotiated with government intervention."

President-elect Donald Trump recently voiced strong support for the union position on automation.

If the proposed terms on automation, which require new port technology to be matched by new jobs, are approved by the full USMX, then the tentative 62% wage increase agreed to in October to end the first strike should be reconsidered.

"The USMX member stated that maintaining automation at the current level may prevent the payment for any increase, which is part of the internal discussion and will be considered by the carriers when deciding whether to accept the deal discussed yesterday."

If a mutual agreement cannot be reached on the use of "Operator Assisted Technology," the subject would be referred to the technology committee process used by the union and ports, which involves a co-chairman and five additional members from each side, as well as Harold Daggett, along with his two sons, Dennis and John. This is the final step before arbitration, if necessary.

The ILA's national office would have the final say on approving personnel additions related to new technology, although these additions would be subject to local union chapter bargaining.

"The terminal operator stated that all decisions are ultimately controlled by the Daggetts, who use this contract to increase their leverage in the union by determining the number of hires and the largest paycheck for the lucky few."