Chinese Last Mile Carriers

In recent news

Last month, Senator Tom Cotton sent an inquiry to the U.S. Department of Justice to open an investigation into Chinese last-mile delivery companies.

The inquiry states: “Chinese firms enter the United States at subsidized prices, capture market share, and embed themselves into daily American commerce. Last-mile logistics is just the most recent example.”

The inquiry accuses Chinese companies of unfair business practices such as:

1. evading customs and tariffs, and
2. serving as intelligence conduits to the Chinese government by providing surveillance of U.S. residents and citizens.

Who are these companies?

Last-mile companies such as UniUni, YunExpress, ZTO, and others, have emerged as notable industrial tenants following the supply chain whipsaws stemming from the pandemic.

Many of these companies occupy large industrial facilities in key end-markets near ports and major trade crossroads in the U.S., giving primarily Chinese manufacturers access to U.S. consumers.

The carriers are often domiciled in North America and maintain an asset-light business model, relying upon third parties to provide shipping. The local last-mile delivery companies then develop and manage the software backbone and relationships with Chinese manufacturers. Some will also manage importing and customs clearance.

Many of these Chinese manufacturers are using e-commerce channels like TikTok, Shein, and Amazon to reach U.S. consumers.

Capital structure and risk

Last-mile shippers are often formed with limited capital. They do not appear to raise equity or debt, yet they can often still grow very rapidly through opaque funding mechanisms.

Evidence of their growth is apparent on the income statement as increased revenue and expenses. They also often have increased operating lease assets and liabilities, but the source of funds for that growth is not often reflected in the equity portion of the balance sheet.

Many of these last-mile delivery companies do not report increases in contributed capital, indicating that funds are from some other source. Some are funded indirectly by larger Chinese financial and strategic investors. Others are heavily reliant on U.S. landlords to fund growth through free rent and tenant improvement dollars. Because of this, and the opacity around these capital sources, there is increased uncertainty and risk associated with them.

The future of last-mile and the potential investigation

It is unclear at this point if the Justice Department will pursue an investigation. If they do, TRA has created the following list of potential impacts on this sector:

· Additional regulatory requirements that would increase business costs
· Fines levied against last-mile operators
· An outright ban on these types of businesses

Investigative precedents

Companies like Huawei and ZTE were listed as national security threats under the National Defense Authorization Act, effectively banning those companies from selling equipment in the U.S.

In another scenario, the One Big Beautiful Bill Act passed in 2025 puts a 25% cap on Chinese ownership in U.S.-based companies in select industries, including photovoltaic panel manufacturers.

There is also the possibility, like with TikTok, of a forced sale to U.S. operators, among other potential outcomes.

What's next?

For commercial real estate professionals, the concerns are twofold:

1. that these businesses are potentially a national security threat and could be presented with new operating conditions, and
2. they are undercutting on price to scale and reliant on landlord capital to partially offload the risks of this attempted growth.

New leases with these tenants may be better matched with more challenged industrial assets in the meantime.

For landlords that have these last-mile delivery tenants in the portfolio already, we recommend monitoring utilization and tenant performance closely.

TRA is available to advise on specific tenant exposures in your portfolio — contact us at info@tra-llc.com.