In a bid to offer brands a faster direct-to-consumer e-commerce access in international markets, United Parcel Service UPS signed an agreement with ESW, a DTC e-commerce company.

This customer-friendly deal pleased investors, leading the UPS stock to gain 1.95% on Mar 28 from Mar 25’s closing price.

Customers of both UPS and ESW will benefit from this arrangement. They will be able to localize their online shopping experience by using UPS’ global transportation and customs brokerage platform for delivery.

By virtue of this deal, brands willing to accelerate DTC expansion process will have access to integrated international e-commerce and shipping capabilities. This, in turn, will enable the brands to reach consumers across the globe via cross-border e-commerce more efficiently. With cross-border online shopping gaining in popularity each passing day, UPS’ deal with ESW seems a prudent move indeed.

Per ESW’s Global Voices 2022 survey, the number of cross-border DTC consumers increased across all age groups between December 2020 and July 2021. The findings further revealed that millennials and Gen Z shoppers are extensive buyers of products from foreign countries.

Expressing delight at the partnership, Bill Seward of UPS said, “This alliance with ESW offers UPS e-commerce customers the ability to sell and ship seamlessly around the world, with the confidence that they are delivering a great shopping experience.”

It is no secret that the northward movement in e-commerce demand during the coronavirus-induced restrictions has been a huge boon for UPS so far. The penchant for online shopping remains strong even with economies reopening and people venturing out for work. This is driven by the race to digitization and alteration in consumer habits among other things.

The above deal with ESW further enhances UPS’ capabilities relating to e-commerce. Also, this e-commerce growth is likely to bolster UPS’ top line.

Zacks Rank & Key Picks

UPS currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks within the broader Transportation sector are as follows:

USA Truck USAK presently sports a Zacks Rank #1 (Strong Buy). USAK’s earnings surpassed the Zacks Consensus Estimate in three of the preceding four quarters (in line in one), the average surprise being 64.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of USA Truck have rallied more than 40% in the past six months. Improvement in the freight market conditions is aiding the USAK stock immensely.