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Why the Yojee Ltd (ASX:YOJ) share price rocketed 32% higher today

One of the biggest movers on the Australian share market on Tuesday has been the Yojee Ltd (ASX: YOJ) share price.

In early afternoon trade the logistics and supply chain management platform provider’s shares are up 22% to 14 cents. At one stage they were up as much as 32% to 15.2 cents.

Why are Yojee’s shares rocketing higher?

This morning Yojee announced that it has entered into a services agreement with Schenker (Asia Pacific).

Schenker (Asia Pacific) is the regional headquarters of the world’s leading global logistics provider operating in Asia Pacific, DB Schenker.

According to the release, the services agreement will see Schenker (Asia Pacific) pay Yojee a fee to commence a project for the implementation of Yojee’s platform into its ecommerce and last mile operations.

This will include covering operations such as warehousing, cross-docking, wharf cartage, route optimisation and operational efficiency modelling, blockchain application, coordination of customer projects, and customer-facing experiences.

Management has advised that the project will run for up to four months, after which both companies will evaluate next steps.

The company’s managing director, Ed Clarke, appears to believe this is a big step forward for the company. He stated that:

“We look forward to working with DB Schenker, a true global logistics leader, to evaluate building an industry leading digital transformation package using Yojee’s platform, AI and blockchain. This agreement with DB Schenker provides strong industry validation of Yojee’s unique value proposition to global logistics companies and the future potential of our technology.”

Should you invest?

While this is undoubtedly a positive development for the company, I think it is a little too soon to invest in Yojee.

In many respects the agreement sounds like a trial which could go either way at the end of the four-month period. Because of this, I think investors should keep their powder dry and wait to see how the agreement goes.

In the meantime, logistics industry peer WiseTech Global Ltd (ASX: WTC) could be a better option for investors. Or even small cap tech share ELMO Software Ltd (ASX: ELO) could be worth a look.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.