Due to initiatives to reduce work hours and overtime, compensation expenses for the US Postal Service dropped by $247 million — or about 2.5% — in the third quarter compared to the same period last year, according to a financial report that the USPS has filed with the Postal Regulatory Commission.
The cuts in employee hours were in response to mail volume decreases, the agency said. The filing also said that new labor agreements implemented in 2007 allowed for a reduction in overtime hours and overall labor rates.
Earlier this month, the USPS reported a net loss of $1.1 billion for its third quarter ending on June 30. According to the USPS, total mail volume was down 5.5% in Q3 of 2008 compared to Q3 of 2007. The impact of lower mail volume coupled with the organization’s efforts to reduce overtime hours decreased total work hour usage by 16 million hours in Q3, the USPS said.
The USPS said that the decrease in volume is the result of a slow down in the economy, “particularly the financial and real estate sectors, which are heavy users of the mail,” in the filing.