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FedEx, UPS, even the U.S. Postal Service rely heavily on rentals this time of year

FedEx, UPS, even the U.S. Postal Service rely heavily on rentals this time of year to handle a surge of package deliveries.
FedEx, UPS, even the U.S. Postal Service rely heavily on rentals this time of year to handle a surge of package deliveries.
Published Dec. 19, 2015

WASHINGTON — At this time of year, a lot of mail is getting delivered in U-Hauls.

FedEx, UPS, even the U.S. Postal Service rely heavily on rentals around the holidays. You might not believe in Santa's sleigh, but something's got to haul all those 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 has 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 said 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 has heard the increase is about 40 percent. Under those circumstances, renting vehicles may actually be the smartest way to go.

"Anybody wouldn't build as many vehicles as they need in December because the rest of the year you have too many vehicles," he said.

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 e-commerce, we have deployed rental vehicles as a cost-effective method to flex our delivery fleet," UPS spokeswoman Kara Ross said. "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 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 car rental. U-Haul is among the largest, but the rental firm said that if you want to move in December, there should still be enough trucks and vans left over.