It's about this time of year that the mail starts getting delivered in a U-Haul.
FedEx, UPS, even the U.S. Postal Service rely heavily on rentals this time of year. You might not believe in Santa's sleigh, but something's got to haul all those holiday packages. That's become a harder and harder job, as America has learned to shop online rather than picking up gifts in stores — and along with hiring tens of thousands of temporary employees, the delivery services have turned to rental car companies for help.
Handling the surge is particularly challenging for the Postal Service, which has historically specialized in handling highly dense first-class mail. Transitioning into the bulky package business — which it's done in a big way in recent years, as a last-mile delivery service for FedEx and UPS — has strained its aging fleet of relatively compact trucks. And the Postal Service's unique, congressionally-mandated budgeting restrictions have made it difficult to replace them at a rate that would keep up with demand, according to an inspector general's report from last year.
Still, renting vehicles might be more than just a stopgap. "The Postal Service has expanded its capacity throughout its network including renting vehicles during peak season for several years, and does so across the country based on local needs and volumes," spokeswoman Sarah Ninivaggi wrote in an email. "Vehicle renting is a low-cost, temporary, peak-season volume management strategy."
Ninivaggi also noted that mail traffic was up by "double digits" from last year. Jim Sauber, chief of staff at the National Association of Letter Carriers, says he's heard the increase is around 40 percent. Under those circumstances, renting vehicles may actually be the smartest way to go. "You build your fleet around your typical needs, and in December you have these peak load periods," Sauber says. "Anybody wouldn’t build as many vehicles as they need in December, because the rest of the year you have too many vehicles."
Sure enough, the other delivery companies — which are more free to borrow money and spend it as vehicle needs change — do the same thing.
"Ever since the rise of ecommerce, we have deployed rental vehicles as a cost effective method to flex our delivery fleet," says UPS spokeswoman Kara Ross, while declining to specify how many rentals thecompany uses. "However, the majority of our customers will see the familiar brown truck when their UPS driver comes to their door and all UPS drivers wear the brown uniform." Rentals are often used to shuttle more packages out to the brown trucks, Ross says.
FedEx has perhaps the most flexibility of all the carriers. Its system of contracting with "independent service providers" who take on ground routes means that vehicles can come in a wider variety of shapes and sizes, though they usually have the FedEx logo on them. A spokesperson confirmed that the company uses rentals during the holiday season as well, but "everybody making deliveries on behalf of FedEx is expected to wear a photo ID badge."
That's an important piece of information, given the fact that some customers have become alarmed at the presence of rental vehicles dropping off packages in their neighborhoods.
The carriers use a variety of companies, including Enterprise Truck Rental, which was founded in 1999 in part to serve the mail delivery market. Frank Thurman, who runs the division of Enterprise Holdings, says demand spikes by about 20 percent during the holiday season. Some carriers rent trucks for months at a time, and are even allowed to put their own decals on the vehicles for better customer recognition.
U-Haul also rents trucks for the holidays, and declined to elaborate on how much of its business during December comes from the mail carriers, or whether they get a break on bulk rates. But the rental firm said that if you want to move in December, there should still be enough trucks and vans left over.
"Despite the high demand for U-Haul rentals from UPS, FedEx and USPS, we still have more than enough equipment to take care of the individuals and families who are do-it-yourself movers," said U-Haul spokesman Jeff Lockridge.
* This story has been updated with more information about Enterprise Truck Rental.