Mailing & Fulfillment Special Report — Rate Case Realities

IT’S ALL ABOUT EFFICIENCY. The Postal Service has always been a labor-intensive operation; about three-fourths of its costs are for labor (salaries and benefits). And, although it has spent billions on automation in recent years, that proportion has hardly changed. But that may be deceiving: inflation has driven up the cost of labor even as the number of employees has decreased steadily, despite equally steady growth in total mail volume. Nonetheless, aware of the impact of rising postage costs on mail volume, the Postal Service persists in looking for ways to become more efficient, an objective that unavoidably has to mean reducing labor costs.