In a bid to expand its logistics capabilities in Africa, United Parcel Service (UPS) inked a deal with Jumia JMIA — a leading e-commerce platform in the country. The deal gives UPS access to Jumia’s last-mile logistics expertise and infrastructure.

The deal with a major player like UPS boosted the Jumia stock, which gained 24.68% on Apr 4, closing the trading session at $11.82.

By utilizing Jumia’s infrastructure, UPS will offer its customers a broader range of delivery solutions, including door-to-door package delivery and collection, with multiple payment options. Moreover, UPS will be able to use the extensive network of Jumia drop-off and pick-up stations in a bid to expand its presence in Africa.

Initially, Kenya, Morocco and Nigeria are covered under the deal. An expansion to include destinations like Ghana and Ivory Coast is on the radar. Finally, the remaining African countries where Jumia operates will be covered by the partnership.

Expressing delight at the partnership, Gregory Goba Ble, vice president of Engineering and Operations for the Indian subcontinent, Middle East and Africa of UPS, said, "This partnership will help small and medium-sized businesses in Africa that make up 90 percent of all businesses on the continent and are the backbone of the economy. UPS's asset-light approach, like the Jumia partnership, offers a pathway for businesses to quickly and reliably connect to new customers around the world through our global network, potentially accelerating their revenue growth."

With the online shopping space growing by leaps and bounds, the e-commerce deal to expand its footprint is a prudent move by UPS. Notably, the last-mile delivery market is projected to see a CAGR of 9.29% between 2021 and 2027.

The surge in e-commerce demand at the moment is another positive for the last-mile delivery market. The penchant for online shopping remains strong even with economies reopening and people going out for work. This is driven by the race to digitization and alteration in consumer habits, among other things.

Zacks Rank & Other Key Picks

UPS currently carries a Zacks Rank #2 (Buy). Investors interested in the Zacks   Transportation sector may also consider stocks like Ryder System R and USA Truck USAK.

USA Truck currently sports a Zacks Rank #1 (Strong Buy). USAK’s earnings surpassed the Zacks Consensus Estimate in three of the preceding four quarters while meeting in one, the average surprise being 64.4%.

Shares of USA Truck have gained 7.3% in the past six months. Improving freight conditions are aiding USAK.