A downturn in shipping demand is impacting the U.S. parcel sector, including United Parcel Service, which on August 8 cut its financial outlook for the year. The company cited a slowdown in global delivery volumes and the fallout from a new labor contract with Teamsters.

The Wall Street Journal reports UPS is now focused on cost-cutting, including reducing working hours, grounding flights and pushing more of its parcels through automated sorting centers.

UPS follows Maersk Line in targeting cost reductions at a time of year that usually brings efforts to expand operations.

The package carrier took an extra hit last quarter from its contract talks with the Teamsters union, which UPS says resulted in $1 billion in lost revenue because customers diverted shipments to FedEx and other rivals. Average daily domestic package volume fell 9.9% in the quarter. UPS is trying to win those shippers back, but it is doing so in a slumping market.