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Meet Variant, the digital fleet transforming U.S. Xpress

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In its second-quarter earnings call Tuesday evening, U.S. Xpress (NYSE: USX) management detailed a new strategy that generated more than 500 basis points of operating ratio improvement in its truckload business: a digitally recruited, dispatched and managed asset-based fleet that could transform over-the-road trucking.

That fleet is called Variant, and it comes complete with a unique look: brand-new gray Freightliner Cascadias tricked out with digital dashboards and driven by experienced drivers looking to run hard. 

Load planning and scheduling are performed by a new suite of machine learning and artificially intelligent algorithms called the Variant Optimizer, which reduces operating costs and allows the fleet to be managed by exception. Variant has “operations specialists” who address an exceptions queue, not fleet managers who hand-hold the drivers. Variant’s platform optimizes for asset utilization and maximizing loaded miles per week, enabling each tractor to generate more revenue and each driver to take home more money.

Variant has already delivered some impressive results: Its fleet runs 20% more loaded miles per week, has 70% lower driver turnover and is far leaner than the legacy model, with five times as many trucks per operational employee. Now U.S. Xpress wants to keep scaling Variant, quadrupling its size over the next two years.

Scaling Variant

U.S. Xpress began acquiring new assets for Variant in the back half of 2019, a deep trough for the trucking industry.

At the time, transportation analysts questioned the wisdom of growing the fleet when overcapacity was suppressing rates and asset utilization, but U.S. Xpress was conducting important proofs-of-concept tests with its new technology. By the end of the first quarter of 2020, 100 tractors were running on the Variant platform and seeing positive results. Today about 475 trucks are in the Variant fleet, U.S. Xpress President and Chief Executive Officer Eric Fuller said.

The big question is whether U.S. Xpress can continue to find efficiencies and deliver the same level of outperformance as Variant scales and accounts for a larger proportion of the overall over-the-road fleet.

The first phase of Variant’s rollout will bring its tractor count to 900 trucks, but ultimately there are about 2,100 historically underperforming trucks in the U.S. Xpress over-the-road fleet that can be converted in the next few years. The conversion process depends on U.S. Xpress’ ability to find the right freight and the right drivers for the Variant model.

The “right freight” means an efficient load, explained Cameron Ramsdell, president of U.S. Xpress Ventures. Ramsdell came to U.S. Xpress in 2019 from Coyote Logistics, where he was chief technology officer; Fuller said he was looking for someone who could bring a fresh approach to the asset-base carrier model.

“An ideal load is a highly efficient load — not much dwell between appointment times,” Ramsdell said. “In terms of freight profile or commodity, we’re pretty agnostic.” 

“Our line of sight in terms of finding the right freight, which is highly efficient and can speed our network velocity, is that the market that we’re in right now seems to be in the favor of the carriers, which will make it easier to get the freight that we need,” Fuller said.

How the Variant platform works

It’s a great irony of the transportation industry that the techniques and operating models developed by venture capital-backed digital freight brokerages may work even better in asset-based trucking carriers. 

One of the main challenges digital brokers have is gathering data on their carriers. Carriers won’t move loads on the digital platform unless they’re offered relevant loads, but digital brokers won’t know if a load is relevant or not until the carrier has operated on the platform and generated some data. The asset-based carrier model resolves that problem, because the trucks stay on the platform permanently. And because Variant is connected directly to its trucks’ electronic logging devices, the platform actually has better real-time views into its drivers’ available hours of service and ability to move a certain load.

“I told Cameron when we were hiring him that we wanted to completely redesign the operating model using the technology that’s available and everything that we’ve learned — good, bad and ugly — about the industry,” Fuller said. “I liked the idea of bringing someone in from the brokerage world, partly because they can only sell their service and what they have day to day. The asset guys have the inherent advantage, but it breeds complacency, and the brokerage world doesn’t have that because they can’t afford it.”

(Photo: Variant / U.S. Xpress)

Variant’s platform ingests all of the freight available in U.S. Xpress’ over-the-road network and can also source freight from external sources if it’s a better fit for one of Variant’s trucks. True to its name, the network is dynamic, not static, and constantly evolving to push asset utilization higher. 

“The Variant Optimizer is sophisticated proprietary software that automates coordination and orchestration,” Ramsdell said. “Daily load acceptance and scheduling are already 90% automated. The Optimizer is connected to the U.S. Xpress order management system and thousands of other shipments, and we use it to optimize every Variant driver to maximize loaded miles and minimize empty miles.”

Variant loads are typical dry truckload freight; Ramsdell said that drop-and-hook and trailer pools work well in the model and that live loads meeting certain parameters are also compatible.

Drivers receive their loads through an app, which also provides turn-by-turn navigation and hours-of-service clock management tools. Ramsdell’s team is already working on the second generation of the Optimizer, which will visualize and calculate events and layer in more artificial intelligence. 

“What we’re trying to solve for is velocity, and keep our trucks moving as much as possible,” Fuller said.

A driver-facing brand

U.S. Xpress envisions Variant as a driver-facing brand. Shippers will continue to engage with the U.S. Xpress brand; Variant trucks may service freight while running under the U.S. Xpress operating authority. The difference is that Variant drivers won’t be micromanaged by dispatchers and fleet managers, will get the opportunity to make more money, and will have the best equipment available.

“The Variant driver has a few years of  experience and they’ve made the decision that they want to become a professional driver,” Ramsdell said. “These are folks that want to run hard and run a lot of miles, and want to take a little more control.”

These drivers tend to perform better and drive more safely, and they have the confidence to operate without much human oversight. That’s not to say that Variant drivers are alone on the road: The app makes it easy to chat with other drivers and stay connected. Variant guarantees to get drivers home when they request home time, too.

“Driver satisfaction is a lot less about the tech and it’s about the mission,” Ramsdell explained.  “The app is a symptom of a great mission. Even the most technologically sophisticated carriers miss that. We’re trying to be the best employer for company drivers in the industry; that doesn’t require a ton of technology. The real benefit is we treat them like the professionals they are, give them the miles they need, and make sure they get home on time — which is a constraint built into our optimizer — so they aren’t missing major life events.”

Driver turnover is an expensive problem in the trucking industry: Seating a truck costs an estimated $12,000 per driver. It’s not uncommon for enterprise carriers to experience annual driver turnover of 70% or more, and there are periods when U.S. Xpress’ turnover exceeded 100%. Already, the Variant fleet has cut driver turnover by 70%, a sign that U.S. Xpress is finding the right drivers for the model and keeping them happy.

“We’re looking for a certain type of driver who’s fairly experienced in the industry,” Fuller said. “They have really good safety stats and are willing to operate in this highly digitized model. We don’t have fleet managers, and some of the hand-holding that goes into the legacy model doesn’t exist. Variant drivers are highly motivated, driven self-starters, who can utilize the system to get the full benefit.”

Source: https://www.freightwaves.com/news/meet-variant-the-digital-fleet-transforming-us-xpress

Blockchain

Potential Benefits of Blockchain Technology in Accountancy

Potential-Benefits-of-Blockchain-Technology-in-Accountancy

Wondering how Blockchain can revolutionize accounting? You have landed on the right page. This article will talk about Blockchain technology, technologies that make Blockchain possible, and how it can impact the accounting domain.    So let’s get started with what this technology is all about.    Table of Contents    What is Blockchain? Technologies That … Read More

The post Potential Benefits of Blockchain Technology in Accountancy first appeared on Blockchain Consultants.

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Potential-Benefits-of-Blockchain-Technology-in-Accountancy

Wondering how Blockchain can revolutionize accounting? You have landed on the right page. This article will talk about Blockchain technology, technologies that make Blockchain possible, and how it can impact the accounting domain.    So let’s get started with what this technology is all about.    Table of Contents    What is Blockchain? Technologies That … Read More

Source: https://blockchainconsultants.io/potential-benefits-of-blockchain-technology-in-accountancy/?utm_source=rss&utm_medium=rss&utm_campaign=potential-benefits-of-blockchain-technology-in-accountancy

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Aerospace

Adept at adaptation

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Adept at adaptation

There may be challenges ahead for the industry, but UK-based AS9100 Rev D accredited precision engineering specialists, Bright Engineering says it is holding its nerve.

Being situated at the heart of East Lancashire’s aerospace belt might normally be seen as an overwhelming benefit for any small business involved in advanced manufacturing. However, as is the case for many subcontractors up and down the country, the grinding to a halt of the commercial aviation sector has proved to be a huge challenge, albeit not entirely insurmountable.

Bright Engineering services a number of industries with the supply of precision components and sub-assemblies and has customers across the UK, and several in the US. Bright counts aerospace as around 20-30% of its operating income, but is fortunate to be involved in many other sectors including green technologies, electronics and automation, as well as defence.

Pre-lockdown, the company had built up resilience on the back of strong multi-sector demand in 2018-2019, and in 2019 pressed ahead with a fairly extensive programme of machine tool investment upwards of £1 million. This expenditure signified Bright’s most major rejuvenation of the shopfloor and replacement of ageing machinery it had seen for several years, and followed a trade mission to Yamazaki Mazak’s headquarters and plant operations in Japan.

Bright’s latest CNC machines include the Mazak Variaxis i500 and the Integrex J200S

For Bright, the benefit of the trip not only extended to witnessing first-hand how the machine tool manufacturer handles quality, but allowed the business to forge new relationships which have endured. From this experience Bright now counts new customers and suppliers which have allowed it to strengthen the business throughout the pandemic.

One of these relationships led to a production order for ventilator components, which carried the business and its people through the dark days of the March 2020 lockdown.

“The medical order at the time of the Covid outbreak was a matter of pride for Bright and its workforce,” says managing director, Jon Hoyle. “It involved working day and night seven days a week until it was complete and our team enjoyed being part of this national effort. It kept us going mentally, as well as at an operational level.”

As the end of the lockdown emerged, Bright’s usual customers started coming back to life, although Hoyle admits in certain sectors it is still only coming back in fits and starts. Sales from the US have remained strong, whereas many buyers in the UK have remained on furlough. The result from this is all to do with adaptability. Pre-lockdown, Bright’s strategic aims were around building a long-term orderbook for the future.

Ready and willing

The company admits the vision is currently a bit shorter-term, but as sales director, Steve Amey says: “It ensures we remain flexible, listen to the needs of our customers and evolve the business plan on a monthly basis. That is the reality of 2020, and we believe that regular refinement of our working model will make us all the stronger in readiness for 2021. The capacity to spring back is ready and waiting.”

Of course, the business has utilised the much-welcomed furlough scheme as the pandemic has evolved. However, it has also taken many positive steps to guarantee operational stability in testing times. In certain cases, remote working has really proved positive for Bright and the workforce have made good use of products, such as Microsoft Teams, Skype, WhatsApp, etc. to really stay in touch, keep things moving for the clients, and transmit key messages to staff around the pandemic.

As well as staff communication, Bright has also engaged some really creative uses of Teams, as Amey continues: “Involvement in the Ventilator Challenge UK project was a fast-paced affair, with design and production requirements evolving several times a day. At one point, Teams was the catalyst for one of the quickest pieces of customer decision-making I have seen in my career.”

The episode Amey refers to was a dramatic win in terms of customer experience, and saw Bright on Teams chat with its own supplier partner, the customer, as well as the end user. The usual protecting of sources had to be put to one side for the good of the project, and in fact led to one of the proudest moments of collaboration Bright has been involved with. With Bright’s strategic input, using the customer’s CAD/CAM package over Teams, a component was redesigned, re-posted to CAM and sample component produced by Bright within 90 minutes of the initial technical query being raised.

Indeed, there have been some other real wins for the business during the course of the year too. As certain staff may have been off work for shielding purposes, the company’s apprentice cohort were relied upon more heavily.

“The conditions thrust on us by this pandemic have actually allowed our apprentices to shine,” states Hoyle. “20% of our workforce are undergoing training from Level 3 to HNC, and during the ventilator production our youngsters seized the challenge, often taking the responsibility that we would expect of a quality inspector or section leader. We got to see their very best attributes over a four-week period and it was impressive.”

Bright has rejuvenated its shopfloor and replaced ageing machinery

Further to keeping production moving, the apprentice team have at times, had slightly more interaction with their leaders, and less day-to-day pressures than any other normal year in the company’s history. Ensuring this time wasn’t wasted, it has allowed for accelerated periods of learning on Bright’s latest complex CNC machines, such as the Variaxis i500 and the Integrex J200S multi-tasking machines. In fact, it hasn’t gone unnoticed across any of Bright’s senior leaders that its apprentices have really seized the opportunity to develop their skills over the last six months.

On the horizon

As Bright looks to the near future, there is an equal mixture of concern and trepidation but also a feeling of opportunity. Hoyle believes there is a strong case for the government to continue some targeted support for the sector. Areas like East Lancashire, Motorsport Valley in the South East, West Midlands, Northern Ireland and the North East all provide a rich and varied contribution to the UK advanced manufacturing output as a whole. Plenty of people in the industry felt a continuation of the job retention scheme was necessary, particularly in a way that specifically encouraged part-time working. The Chancellor has since made his announcement, but Bright would also like to see business rate support as well as increased assistance for apprentices over the age of 18, particularly those on HNC programmes.

“Aerospace provides a large portion of business to UK subcontractors and government and companies themselves need to get to the other side of the pandemic in one piece,” concludes Hoyle. “For the foreseeable future, we control costs, look at alternative revenue streams and get even closer to our existing customers.

“Customers in the main aren’t looking to exploit the current situation. Instead they want reliable trustworthy supply chain partners and our continued support. We also talk to our competitors and listen to their problems and successes; sharing best practice is usually free of charge, but highly valuable, and that one successful collaboration could make all the difference to our joint future success.”

www.brightengineering.co.uk

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Source: https://www.aero-mag.com/bright-adept-at-adaptation-13102020/

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Aerospace

ElevAero acquisition strengthens Midlands based supply chain

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ElevAero acquisition strengthens Midlands based supply chain

Adam Bartram director of ElevAero (left) with FPL’s former owner Geoff Neale

ElevAero, a leading manufacturer and supplier of specialist fabrications, assemblies and machined components for the aerospace and defence sectors, has acquired 100% shares of Formrite Precision Limited (FPL). The acquisition took effect from the 1st of October 2020 for an undisclosed sum as ElevAero continues to expand from its base in Nuneaton (UK).

FPL has established facilities in Aldridge, West Midlands, supplying a range of tooling and precision components to the aerospace and industrial gas turbine industries. Core services provided by FPL include large fabrications, machined components, test rigs and ground support equipment and assemblies. The company has leading OEMs and large tiered engine suppliers in its customer base.

FPL manufactures large fabrications, machined components, test rigs and ground support equipment

ElevAero says the acquisition is a strategic purchase which will complement and enhance its cost-effective offering for aerospace component manufacture, assembly and low-cost sourcing and supply.

Adam Bartram, director and owner of ElevAero said: “We have been looking to acquire Formrite Precision for some time to strengthen our position in the marketplace and to offer our clients a total end to end supply option. In a challenging time for the aerospace industry we are very proud to be in a position to continue investing in the right opportunities that will provide our customers with reliable, competitive supply solutions whilst protecting and creating jobs in the Midlands.”

www.elevaero.com

https://formrite.co.uk

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Source: https://www.aero-mag.com/elevaero-acquisition-strengthens-midlands-based-supply-chain/

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