West Coast waterfront employers and the International Longshore and Warehouse Union failed to reach a contract settlement before the old agreement expired at 5 p.m. PT Monday, but both sides agreed to extend the current contract on a day-to-day basis.

Negotiations are scheduled to resume at 2 p.m. today in San Francisco, although the ILWU and Pacific Maritime Association are still far apart on crucial issues such as maintenance of benefits and the introduction of computer technology to improve productivity at West Coast ports.

Employers pushed for the contract extension because it gives them more leverage to respond to possible job actions by dock workers. However, the West Coast Waterfront Coalition, which represents importers and exporters, does not want the negotiations to drag on inconclusively for too long because shippers fear the end result will be a contract that lacks substance.

The ILWU has scheduled a caucus to ratify the new contract on July 22. Since the PMA and ILWU missed the July 1 deadline, the shippers group fears that negotiations will slip into low gear until the next deadline approaches. Shippers want the PMA and ILWU to stay at the bargaining table until a settlement is reached.

The PMA over the weekend presented the union a contract proposal that calls for maintenance of health and welfare benefits, a wage increase and an increase in pension benefits. The PMA proposal also contained language that would give terminal operators more flexibility to utilize modern technology, much of which is already in use at ports in Europe and Asia. The ILWU rejected the proposal.

On Monday, the ILWU presented its counter-proposal. Employers went into a caucus to consider the proposal, but Monday night informed the union it still has a long way to go to meet employer demands.

Both sides agreed to extend the existing contract on a day-to-day basis. That means they must agree at the end of bargaining each day to extend the contract for another day. That keeps the no-strike provision in the contract in effect.

At this time, a strike appears unlikely. The Bush administration would most likely intervene immediately, ordering longshoremen back to work during a cooling-off period. A strike would require a vote by the membership, and the ILWU hasn't even drawn up a strike ballot yet. An employer lockout would most likely meet the same fate from the Bush administration.

The greatest fear of employers, as well as importers and exporters, is that longshoremen will engage in crippling work slowdowns as they did during the 1996 and 1999 contract negotiations. Rolling slowdowns are difficult to prove and especially difficult to stop. They are also quite costly because terminal operators end up hiring twice as much labor to perform the same work. Slowdowns are intended to get importers and exporters nervous about the fate of their shipments so they will pressure waterfront employers to reach a settlement.

However, Robin Lanier, executive director of the West Coast Waterfront Coalition, said shippers this time will not be "patsies" and will not pressure the PMA to accept a contract that fails to improve productivity at West Coast ports.

By Bill Mongelluzzo