Cotton Asks DOJ to Probe China-Backed Parcel Carriers Over Subsidies and Data

Why Cotton Wants DOJ to Investigate China-Backed Couriers

Sen. Tom Cotton (R-Ark.) has asked the Department of Justice to investigate Chinese-controlled parcel delivery companies operating in the U.S., arguing that subsidized pricing, detailed data collection and customs practices give them an unfair edge over domestic carriers.

In a May 19 letter to Acting Attorney General Todd Blanche, Cotton named Gofo, SpeedX, UniUni, J&T Express and Zongteng subsidiaries YunExpress and Cirro Logistics as companies that have "infiltrated" the U.S. to serve e-commerce platforms such as Shein, Temu and TikTok Shop. He asked DOJ to examine their ownership, the data they collect, whether their pricing violates antitrust law, and whether they facilitate tariff evasion and customs fraud.

The carriers deny the allegations. Gofo, a New York-incorporated company that says it only handles last-mile delivery, told FreightWaves it operates in compliance with U.S. law, stores data under U.S. data protection rules and does not engage in subsidized or predatory pricing. UniUni, a Vancouver-based carrier planning to go public through a SPAC deal at a $1 billion valuation, said it is Canadian-founded, Canadian-controlled and transparently operated.

The request lands as a wave of startup couriers, many launched during the pandemic e-commerce boom, take share from FedEx, UPS and regional players, and as Washington has already closed the de minimis import loophole that once made direct-from-China shipping unusually cheap.

Where a Parcel-Carrier Investigation Would Bite

The Competitive Pressure Behind the Letter

Industry analysts quoted in the article agree the China-connected startups are a real competitive force, using an ultra-low-cost model and lower compliance standards that put pressure on FedEx, UPS and regional carriers. They split, however, on whether this is a security issue or ordinary price competition. One parcel consultant called the national security framing "theatrics," while parcel industry veteran Mark Waverek said rates below the actual cost of delivery, including the absence of fuel surcharges during diesel price spikes, suggest a strategy of driving competitors out. No company has so far been found by regulators to use subsidies or predatory pricing; that remains an allegation.

Data: A Genuine Question or a Familiar Talking Point?

Hovership CEO John Zendejas argues delivery data — including shipper names on packages — can reveal consumer buying habits, and that Chinese firms could be compelled to share that data with their government. A logistics consultant counters that much of the same information is already public through Google Maps, addresses and home values, and that a more legitimate inquiry would focus on driver and warehouse compensation. The unresolved question DOJ would have to settle is whether street-level delivery data aggregated at scale, including geolocation and delivery patterns, becomes a distinct intelligence asset that U.S. law does not currently protect.

What an Investigation Would Examine

Cotton specifically asked DOJ to probe ownership and control, government access to data, alleged predatory pricing and tariff evasion. Analysts note that tracing who is actually behind these companies is difficult because investors are often interconnected and undisclosed. Gofo says it handles no cross-border customs clearance — all shipments enter its network only after clearing U.S. Customs — so accusations of customs fraud "do not apply" to its business. UniUni, which received a $30 million investment from China-based Rockets Capital in March, emphasizes Canadian control and governance.

Already-Shifting Economics

The market context matters. Last year's closure of the de minimis exemption removed the duty-free, low-paperwork route that made direct-to-consumer fulfillment from China attractive. Chinese marketplaces have responded by leasing U.S. warehouses, stocking them with China-made goods shipped by ocean, and fulfilling orders from American soil. That shift could blunt some of the advantages Cotton describes even as it keeps Chinese-linked logistics embedded in U.S. e-commerce.

What Shippers and Carriers Should Watch if DOJ Acts

For parcel shippers and logistics operators, the practical question is whether Cotton's request turns into a formal DOJ inquiry. A few specific things are worth tracking:

• Watch for any DOJ response to the May 19 letter; a formal investigation would put Gofo, UniUni, SpeedX and Zongteng affiliates under scrutiny over ownership, pricing and data practices.
• Shippers using low-cost China-linked carriers should review whether their delivery partners disclose ownership, data storage and compliance policies, using the statements Gofo and UniUni already issued as a baseline.
• Retailers selling through Shein, Temu and TikTok Shop should track how the de minimis closure has pushed fulfillment into U.S. warehouses, changing which carriers touch their parcels and where customs liability sits.
• Legacy and regional carriers, including the coalition working with Hovership on Capitol Hill, should document alleged below-cost pricing and customs practices, since concrete evidence would be central to any antitrust or subsidy examination.