The Yojee Ltd (ASX: YOJ) share price performance has been a highlight during trade on Friday.
In afternoon trade the logistics and supply chain management platform provider's shares are up over 14% to 21.7 cents.
Why are its shares storming higher?
This morning Yojee announced that it has entered into a pilot services agreement with UPS Asia Group Pte Ltd, a subsidiary of United Parcel Service.
The agreement has been made in order to establish a proof of concept for the use of Yojee's blockchain technology in the UPS specific supply chain environment.
According to the release, Yojee will deliver the pilot by early April and no revenue will be derived from the agreement.
Rob Houck, Vice President of Strategy for UPS Asia Pacific, was quoted as saying "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."
Yojee's managing director, Ed Clarke, feels that the agreement highlights the global interest in applying blockchain technologies to logistics industry.
How does the technology help?
The company believes that blockchain technology can deliver a cheaper, more efficient, transparent, and secure system to manage the enormous growth that has been forecast in global logistics over the next decade.
Pleasingly for shareholders, management thinks it is positioned perfectly to profit from this opportunity due to its early mover advantage, its unique artificial intelligence and blockchain backed supply chain technology, and its team of in-house supply chain and blockchain experts based in the fast-growing Asian market.
Should you invest?
Attracting a company like UPS to pilot the technology is a great step forward. But at this stage it is only a pilot, let's not forget.
If the pilot develops into an actual agreement that generates meaningful revenues then I'll certainly be interested in taking a second look, but until then I think the prudent thing to do is to hold off investing and wait for further news.
In the meantime, tech shares like Appen Ltd (ASX: APX) and ELMO Software Ltd (ASX: ELO) could be better options for investors.
