U.S. Senator Flags “Last-Mile” Logistics: Three Key Risks in Data, Pricing, and Customs Compliance

On May 19, 2026, U.S. Senator Tom Cotton sent a letter to Acting Attorney General Todd Blanche requesting an investigation into last-mile delivery companies operating in the United States with Chinese ties. While the letter is a political statement at this stage, the compliance issues behind it—data security, antitrust, anti-fraud, and customs compliance—deserve close attention from the entire logistics industry.  

If your company operates in U.S. last-mile delivery, overseas warehousing, third-party logistics, or cross-border e-commerce supply chains, please contact the ILS legal team at contact@consultils.com. We help businesses assess compliance risks, strengthen internal controls, and support more stable U.S. operations.

Four Compliance Risks Raised in the Letter

Senator Cotton’s letter does not focus solely on whether a company has foreign capital or Chinese ownership. Instead, it highlights four categories of concerns that may arise as last-mile delivery networks expand in the United States:

• Ownership and control structure: whether the actual control, governance, and ownership structure of U.S. operations is transparent;

• Data security and access rights: how delivery data is stored, used, and shared, and whether overseas affiliates may access it;

• Pricing and market competition: whether low-cost delivery models have a reasonable business basis or could raise antitrust concerns;

• Customs and import compliance: whether companies or their partners may be involved in undervaluation, transshipment arrangements, or inaccurate importer information.

It is important to emphasize that the letter is currently only a request from a senator. It does not mean the Department of Justice has opened a formal investigation, nor does it establish that any named company has violated the law.

However, for logistics companies that are rapidly expanding, serving major cross-border e-commerce platforms, or operating both overseas warehouses and last-mile delivery networks, this development is a clear warning: companies should proactively review their data governance, competition compliance, and cross-border supply chain risk controls.

Why “Last-Mile” Delivery Is Drawing Regulatory Attention

Over the past few years, cross-border e-commerce platforms such as Temu, Shein, and TikTok Shop have grown rapidly. This growth has increased U.S. consumer parcel volume and created major opportunities for last-mile delivery and third-party logistics providers.

At the same time, as logistics companies with Chinese backgrounds or affiliations expand across North America, their delivery networks, operational data, and supply chain roles have attracted increasing attention from U.S. policymakers.

The companies referenced in Senator Cotton’s letter generally fall into several categories:

Company Category	Key Features
Pure Chinese-backed logistics companies	Chinese cross-border logistics giants expanding into North American last-mile delivery
U.S.-registered companies with Chinese ties	Directly serve e-commerce platforms such as Shein and Temu
Overseas-registered companies with Chinese affiliations	Rapidly expanding in North America and participating in e-commerce logistics and last-mile delivery

Last-mile delivery attracts attention because it is not merely about “delivering packages.” It sits at the intersection of three sensitive areas:

• Last-mile companies directly reach consumers and commercial locations. In daily operations, they may handle residential addresses, business customer information, route data, delivery frequency, and package-flow information.

• They directly participate in U.S. domestic market competition. As delivery volume grows and price competition intensifies, low-cost business models, capital support, and market-share shifts may trigger competition-related scrutiny.

• They connect to the final stage of cross-border supply chains. For companies serving cross-border e-commerce platforms, overseas warehouses, or import-related businesses, last-mile delivery may intersect with importer information, declaration practices, and customs compliance issues.

This shows that the regulatory concern is not simply whether a company has foreign capital. The more important question is whether the company’s business model, data flows, and cross-border supply chain arrangements are transparent, compliant, and verifiable once it becomes deeply embedded in the U.S. delivery network.

 

Impact on Cross-Border Logistics Companies

At this stage, it is too early to say whether the Department of Justice will formally launch an investigation. But if regulators do become involved, the risks for affected companies may extend far beyond public attention.

1. Document Requests and Business Review

Companies may be asked to provide documents relating to ownership structure, affiliate transactions, customer contracts, delivery-data access records, pricing policies, import declaration materials, and partner information. For businesses with incomplete internal records, unclear business relationships, or weak data controls, the cost of responding could rise significantly.

2. Significant Fines and Repayment Exposure

If regulators find that a company or its partners were involved in inaccurate customs declarations, tariff avoidance, antitrust violations, or other unlawful conduct, the company may face fines, tariff repayment obligations, contract damages, and other administrative or civil liability.

3. Impact on Customers, Financing, and IPO Plans

For companies serving large e-commerce platforms, pursuing financing, considering mergers and acquisitions, or preparing for a public listing, even an unresolved regulatory inquiry may cause customers to reassess cooperation, investors to pause transactions, or capital markets disclosure pressure to increase.

4. Operational Restrictions or Disruption in Serious Cases

If a regulatory review touches key import channels, major customer arrangements, data-processing workflows, or the company’s core business model, the company may face business suspension, termination of partnerships, operational restructuring, or even the inability to continue certain operations.

For logistics companies, the key is not to wait until a government inquiry arrives and then try to explain the business. The better approach is to build a clear, verifiable compliance system into daily operations before external scrutiny begins.

Compliance Checklist for Logistics Companies

For last-mile delivery, overseas warehousing, and third-party logistics companies operating in the United States, we recommend conducting an internal compliance review focused on the following areas:

• Ownership and governance structure: Map the ownership, management authority, fund flows, and business relationships among U.S. entities, overseas shareholders, and affiliates.

• Data governance mechanisms: Identify where delivery data, customer information, and route data are stored, who has access, how cross-border transfers are handled, and who is responsible for security controls.

• Pricing and commercial records: Review pricing policies, discount arrangements, and affiliate support, and maintain records showing a reasonable business basis for pricing decisions.

• Import and customs processes: Clarify the company’s roles and responsibilities in importation, customs declaration, overseas warehousing, last-mile delivery, and platform partnerships. Establish review mechanisms for unusually low declared values, unclear importer information, or unusual transaction structures.

• Contracts and partner management: Review customer agreements, vendor contracts, and data-processing terms to ensure counterparties take on appropriate compliance commitments, information accuracy obligations, and risk-allocation responsibilities.

• Investigation response readiness: Establish an internal response protocol for regulatory inquiries and government investigations, including document preservation, internal reporting, external communications, and legal counsel involvement.

For companies that are rapidly scaling, preparing for financing or listing, serving major cross-border e-commerce platforms, or operating both overseas warehouses and last-mile delivery networks, these reviews are especially important. The earlier a company identifies weaknesses in its internal processes, the better positioned it will be to reduce the risk of fines, operational disruption, and damage to key business relationships if external scrutiny arrives.

Final Takeaway

Cross-border logistics companies are gaining significant commercial opportunities in the U.S. market, but they are also entering a more complex regulatory environment. As operations expand, ownership structure, data flows, pricing strategy, and import compliance may all become areas of regulatory focus.

For last-mile delivery, overseas warehousing, and third-party logistics companies, speed matters—but compliance must keep pace. Whether a company can maintain a strong compliance system may directly determine whether it can operate sustainably and stably in the United States.

If your company operates in U.S. last-mile delivery, overseas warehousing, third-party logistics, or cross-border e-commerce supply chains, please contact the ILS legal team at contact@consultils.com. We help businesses assess compliance risks, strengthen internal controls, and support more stable U.S. operations.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

---

As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949