US Postal Service 2008 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2008 US Postal Service annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

2008 Annual Report United States Postal Service | 33
Compensation and
Benefits Expenses 2008 2007 2006
(Dollars in millions)
Compensation $ 40,633 $ 41,695 $ 40,577
Retirement 5,899 5,737 7,006
Health Benefits 5,376 5,401 5,345
Workers’
Compensation 1,227 880 1,279
Other 450 473 458
Total $ 53,585 $ 54,186 $ 54,665
In 2007, personnel compensation and benefits costs of
$54,186 million were $479 million, or 0.9%, less than 2006.
The decrease was due to elimination of the employer’s
share of the CSRS contribution resulting from the enact-
ment of the new law and reductions in workhours, comple-
ment, and workers’ compensation costs.
Although total compensation and benefits were lower in
2007, our labor costs increased by $1,118 million, or 2.8%.
COLA increases in 2007 added $871 million to our compen-
sation expenses. These increases were offset somewhat by
a decrease of 36 million labor hours. Our 2007 average hour-
ly labor cost increased by 1.6%, compared to an increase of
4.5% in 2006. In 2007, workers’ compensation decreased
by $399 million. See Workers’ Compensation later in this
section and Note 11, Workers’ compensation, in Notes to
the Financial Statements for additional information.
Workhours
In addition to labor and benefits rates, workhours are a
major driver of our compensation and benefits expense.
In 2008, mail processing, customer service, city delivery,
and other workhours decreased by 50 million compared
to 2007 offsetting the higher labor rates. The reduction in
workhours was in part an outcome of lower mail volumes,
which reduced workload. As mail volume fell throughout the
year, management initiated a number of efforts to reduce
workhours, especially overtime.
Workhours by Function 2008 2007 2006
(Workhours in thousands)
City Delivery 452,288 462,040 468,918
Mail Processing 293,108 315,825 332,269
Customer Services & Retail 217,236 233,791 246,538
Rural Delivery 189,950 189,709 186,164
Other, including Plant, Operational
Support, and Administrative 220,772 221,636 224,840
Total Workhours 1,373,354 1,423,001 1,458,729
Rural delivery increased 0.2 million workhours in 2008. The
rural delivery workhour growth was driven by the addition of
almost 710,000 new rural delivery points.
Workhour Reductions
(Hours in millions)
----50
-40
-30
-20
-10
0 200820072006
-50
-36
-4
In 2007, total workhours decreased by 36 million hours
compared to 2006, partially offsetting the higher labor
rates. Mail processing, customer service, and city delivery
workhours decreased 36 million hours.
Rural delivery increased 3.5 million workhours in 2007. The
rural delivery workhour growth was driven by the addition of
more than one million new rural delivery points. Other work-
hours decreased by three million compared to 2006.
Workhours have been reduced in eight of the last
nine years with only 2005 showing a slight increase.
Since 2002, workhour reductions have been the single
biggest contributor to the ongoing achievement of our
savings targets.