Digital logistics company Yojee (ASX: YOJ) has signed a pilot services agreement with UPS Asia Group, a subsidiary of the United Parcel Service (UPS), to field test its blockchain-powered logistics technology.
UPS is currently one of the top 3 leading logistics companies, serving millions of customers across 220 countries. Given the huge (and growing) volume of data being managed by globally-active logistics companies such as UPS, strong demand for blockchain-powered solutions has arisen due to the potential efficiencies blockchain applications and distributed ledgers offer large businesses.
If the announced pilot proves successful, the two companies could potentially sign a more definitive agreement and expand their level of collaboration, which could serve as a significant commercial boost for Yojee.
“Deploying technology-enabled operations for maximum efficiencies remains a priority for UPS. We look forward to working with Yojee to identify the application of new technologies to our business,” said Mr Rob Houck, Vice President of Strategy of UPS Asia Pacific.
Blockchain to the rescue
Blockchain systems provide an unprecedented opportunity to transform logistics and supply chains, with huge benefits to business and customers. As such, large freight and logistics companies are investing heavily in blockchain technology to lighten the load of growing datasets and to maintain their market dominance.
In essence, UPS sees blockchain and distributed ledgers as a direct means of delivering a cheaper, more efficient, transparent and secure platform from which to manage the strong growth in international trade and the rapidly growing numbers of packages being sent each day.
According to industry research done by Logistics Management, freight and logistics in the US alone account for nearly US$1.5 trillion in annual revenue. Several economies around the globe are industrialising too quickly for existing infrastructure to cope and to adequately deliver the level of service demanded by customers.
As several economies scale up in unison, and in competition with each other, the amount of money spent on shipping, freight, storage and insurance as part of an ever-evolving international supply chain, is likely to keep growing indefinitely.
Yojee’s involvement with UPS follows up on a separate deal signed last year with Scharff International, a freight forwarding specialist that makes up a part of the FedEx network.
Scharff has said it will implement Yojee’s logistics software technology across its four business units in Peru and Bolivia, with further synergies to be explored as the relationship develops.
Mr Ed Clarke, Managing Director of Yojee said that “this Blockchain Pilot Services Agreement with UPS highlights the global interest in applying blockchain technologies to the freight and logistics industry and Yojee’s unique sector capabilities.”
“We look forward to working with UPS, the world’s largest package delivery company, to pilot Yojee’s blockchain-backed platform in the Asia Pacific region, the largest and fastest growing region in global logistics,” Mr Clarke added.
News of the potentially lucrative collaboration with UPS sent Yojee shares 18% higher in early morning trade, with shares changing hands at $0.23 per share, at the time of writing.