Charlie Woo, like many local businessmen with their hands in international commerce, has some not-so-fond memories from the summer of 2002.
As chief executive of Megatoys Inc., a Los Angeles toy retailer that imports most of its products through the local seaports, Woo struggled to keep his business afloat six years ago as a contentious contract dispute between West Coast dockworkers and shippers slowed and then temporarily shut down the harbor.

“It had a major impact. I took a big loss,” he said. “The orders all came in late. I had to use air freight just to meet customer demand, and every time we did that, a profit turned into a loss because the freight itself was more expensive than the toys.”

The 10-day worker lockout that paralyzed the West Coast’s 29 ports cost the U.S. economy upwards of $10 billion.

Now, Woo and thousands of other port users are watching and waiting as the International Longshore and Warehouse Union and the Pacific Maritime Association return to the bargaining table to hammer out a new labor agreement for 25,000 dockworkers and marine clerks.

The two sides began talks in San Francisco last week, almost four months before the six-year contract expires and much earlier than usual. The hope is to reach an agreement before the July 1 deadline and avoid any work stoppage.

“Starting early is always a good sign, but it doesn’t mean it will end early,” said Daniel Mitchell, a labor expert and UCLA professor of management and public policy.

The longshore union represents tens of thousands of waterfront laborers whose salaries often top $100,000 per year – placing them among the highest-paid blue-collar workers in the country. The longshoremen, among the few union workers who are seeing their ranks grow, handle virtually every cargo container that enters or leaves the ports.

The union is one of the nation’s most powerful, in part because shippers and retailers are so heavily dependent on the Los Angeles and Long Beach ports, Mitchell said. The local port complex – the largest in the nation and fifth-largest in the world – handled 15.7 million cargo containers last year, which accounted for over $100 billion in economic activity.

“You can’t outsource the port. If you are dependent on either shipping out or shipping in, you don’t really have lots of alternatives,” he said. “That’s always been the reason why the union has been in a strong bargaining position. At the end of the day, employers have been willing to pay (dockworkers) relatively high wages.”

Union officials are expected to try to protect their benefits package, which averages about $50,000 per employee annually. Under a health care plan described by maritime officials as “the envy of most Americans,” workers pay no premiums and receive total coverage for standard medical benefits.

The union also has said new safety standards and measures to reduce port pollution will be discussed. Since 2002, more than 10 workers have died on the job.

Spokesman Craig Merrilees acknowledged that the talks could prove difficult, but the union plans to hold its ground and fight for the workers.

“Both sides are working hard to avoid the mistake that management made in 2002 when they shut down the ports and locked out the workers,” he said. “The union is concerned about making sure that good jobs are available in the port communities.”