PRC Logistics Firms in the United States and Mexico Support Military-Civil Fusion

Executive Summary:

• Beijing is expanding global logistics infrastructure under the direction of its military-civil fusion agenda, enabling commercial assets to serve national defense needs.
• Logistics companies with ties to the People’s Liberation Army (PLA) have built extensive networks overseas, including in the United States and Mexico. The firm SF Express has built over 950 overseas warehouses worldwide and partnered with actors linked to the Chinese Communist Party’s (CCP) united front system.
• In the United States, SF Express operates through over 20 subsidiaries and collaborates with WorldCPS, a major Chinese-owned logistics firm—also linked to the united front system—establishing infrastructure that could be leveraged for dual-use purposes under the military-civil fusion development
• In Mexico, PRC logistics firms, including SF Express, YTO Express, and Alibaba’s Cainiao, have rapidly expanded their presence through acquisitions, dedicated shipping lines, and infrastructure projects, aligning commercial growth with the CCP’s military-civil fusion objectives.

The Chinese Communist Party (CCP) sees its global logistics networks as serving purposes that extend beyond the purely economic. The Party has long emphasized the integration of civilian infrastructure into its national defense strategy, and logistics is a key component of this military-civil fusion agenda. The Party is keen to enhance and expand its overseas logistics operations. In March 2025 at the annual Two Sessions meetings in Beijing, Premier Li Qiang (李强) told the assembled representatives of the National People’s Congress (NPC) that it is necessary to “improve the cross-border delivery and logistics system, and strengthen the construction of overseas warehouses” (完善跨境寄递物流体系，加强海外仓建设) (Xinhua, March 12). The comment formed part of his remarks on trade in the Government Work Report, the People’s Republic of China (PRC) government’s most authoritative annual policy document. By expanding its reach overseas through private—or nominally private—companies, the Party retains the option to repurpose these assets for military use when needed.

Private Logistics Firms Must Support the Military

Under the military-civil fusion development strategy, the PRC treats logistics infrastructure assets as supporting both economic and defense objectives. At its second plenary meeting in September 2017, the Central Military-Civil Fusion Development Committee promoted a reconceptualization of logistics: “Modern logistics is military-civil fusion logistics” (现代后勤就是军民融合后勤). The meeting also called for “proactively leveraging the spatial advantages of a modern, nationwide logistics network to systematically advance the development of military-civilian fusion logistics” (主动利用现代物流网络等布局完善、通达全国的空间优势，成体系推进后勤军民融合发展) (Xinhua, September 22, 2017). Logistics is mentioned as a category in the “Catalog of Construction Projects Closely Related to Both Economic Development and National Defense (2016 Edition)” (经济建设与国防密切相关的建设项目目录(2016 年版)) (NDRC, accessed April 16). The determination of projects is co-managed by the National Development and Reform Commission (NDRC) and the Central Military Committee’s (CMC) Office for Strategic Planning (战略规划办公室) (NDRC, December 27, 2017).

Private logistics companies are required to support the military. In March 2021, an op-ed published in the armed forces’ mouthpiece, the PLA Daily, stated that “logistics companies should fulfill their statutory national defense obligations and contribute to the development of military logistics” (应当担起法定的国防义务，为军事物流发展助上一臂之力) (PLA Daily, March 26, 2021). Companies also have been encouraged to expand overseas for military purposes. A professor affiliated with the Joint Service College of the PLA National Defense University has argued, also in the PLA Daily, for internationalizing civilian logistics in order to “build an overseas military logistics support system” (构建海外军事物流保障体系) (Sanqin City Newspaper, October 22, 2018; PLA Daily, November 28, 2019). Another article published in the state-owned magazine Security Line (警戒线) by an author affiliated with the Army Service Academy also suggested that private companies expand overseas logistics networks. The author recommended the government adopt a flexible approach in which logistics assets are “not to be owned but to be used” (不为所有，但为所用), utilizing cooperative, entrusted, and commercialized models to tap into both domestic and international logistics resources (Security Line, April 2, 2020).

Government policy supports the expansion of logistics networks abroad. The “Five-year Plan on Modern Logistics for the 14th Five-Year Plan Period” (“十四五”现代物流发展规划) considered its existing logistics infrastructure “strong domestically but weak internationally” (内强外弱). As a result, it announced plans to accelerate the development of a globally integrated logistics network, including “encouraging large logistics enterprises to engage in the construction, cooperation, and resource-sharing of overseas ports, overseas warehouses, and distribution networks” (鼓励大型物流企业开展境外港口、海外仓、分销网络建设合作和协同共享) (General Office of the State Council, December 16, 2022). Policies like this and those contained in annual government work reports have paved the way for the emergence of private logistics companies that not only expand the PRC’s commercial presence abroad but also serve as potential nodes in the People’s Liberation Army’s (PLA) global support infrastructure.

PRC Logistics in the United States: The Case of SF Express

SF Express (顺丰速运), a PRC company, has signed military-civil fusion cooperation agreements on logistics with the CMC and the PLA. Since the launch of the military-civil fusion logistics system in 2016, SF Express has participated in multiple pilot projects providing services to the military (PLA Daily, January 23, 2018). This includes collaborating with the CMC Logistic Support Department’s Transport and Delivery Bureau (运输投送局) on the launch of an air cargo logistics route from Chengdu to Lhasa. The firm also signed a five-year agreement on “Air Force Logistics and Military-Civil Fusion Strategic Cooperation” (空军后勤物流军民融合战略合作协议) with the PLA Air Force Logistics Department. The deal covers transportation and distribution, warehouse management, procurement, information integration, scientific research and innovation, capacity building, military support services, and supporting infrastructure. It also includes organizing a joint resupply exercise with the Air Force Logistics Department using drones in Yunnan and Shaanxi (PLA Daily, November 6, 2017, January 23, 2018; Xinhua, January 28, 2018; DSB.cn, December 12, 2018). In the past few years, SF Express has also provided services like warehouse logistics and cargo transportation for military units, troops, and military-linked companies (WireScreen, accessed May 5).

SF Express is clearly committed to following PRC national strategy. In December 2017, the company’s head, Wang Wei (王衞), delivered the following statement (Sina, December 13, 2017):

“[SF Express] will actively respond to the national military-civil fusion development strategy. Leveraging its long-standing expertise and capabilities in supply chain management, SF Express will provide warehousing logistics, material procurement, and other supply chain services tailored for specialized materials and unique application scenarios to the military, military-industrial enterprises, and social clients, thereby facilitating the transformation and upgrading of the military procurement supply chain.” [1]

PRC reports reference a “special logistics division” (特种物流事业部) set up by SF Express. This division has apparently conducted visits and research at relevant PRC central government ministries and military branches, including within the Army, Navy, Air Force, Armed Police, and Joint Logistics Support Force (Shenzhen UAV Industry Association, October 26, 2017).

SF Express has been expanding its reach overseas, aligning with government guidance. The company’s 2024 annual report stated that it has continuously strengthened its networks in Europe and the United States through “multi-modal” (多模式) approaches (SF Express, March 28). The company currently has over 950 overseas warehouses and controls 882 registered companies around the world (Sohu Stock/SF Holdings, March 28). Its global “air network layout” (全球航网布局) includes a hub in Ezhou that serves the European and North American markets, and one in Shenzhen that connects to Southeast Asia, Japan, and South Korea (SF Express, March 28). The former hub in Ezhou, Hubei Province, known as the SF International Cargo Airport and operating as part of the Ezhou Huahu International Airport, has been listed as an important military civil fusion development project since its establishment in 2015 (Jiangxi National Defense Education Network, May 26, 2016; National Engineering Laboratory for Logistics Information Technology, December 2018; China National Defense Newspaper, March 7, 2018). The company controls 24 subsidiaries in the United States and seven in Canada. These could be used to serve dual-use functions in a future conflict scenario.

SF Express uses collaboration as a way to expand overseas, often via people and organizations connected to the CCP’s united front system. For example, it works closely with WorldCPS (天马物流集团) to provide logistics services (WorldCPS, November 14, 2018). Headquartered in Los Angeles, Chinese-language media describe WorldCPS as the largest Chinese-owned warehouse and logistics company in the United States, offering services such as cross-border e-commerce fulfillment, warehousing, and last-mile delivery. The company operates seven large-scale overseas warehouses across major U.S. cities, including Los Angeles, New York, Chicago, San Francisco, Portland, Dallas, and Atlanta, with a total warehouse area of 500,000 square feet and more than 50 loading docks (EDI Media, November 19, 2021). WorldCPS’s founder and chairman, Luo Hao (罗豪; also known as Steven Luo), has played prominent roles in multiple overseas organizations linked to the PRC’s united front system (Sino US Times, December 29, 2019). Luo has also been recognized by united front-affiliated media as a representative figure in U.S.-China relations. The Sino US Times named him one of the “Top 40 Outstanding Chinese in America” in 2019, an award organized to commemorate the 40th anniversary of diplomatic relations between the two countries (Economic Daily, December 30, 2019). Given its extensive U.S.-based infrastructure, WorldCPS’s close collaboration with SF Express raises concerns that this network could be leveraged by SF Express to support PRC defense objectives within the United States.

Mexico

Companies that have expressed support for military-civil fusion have also steadily expanded their logistics presence in Mexico—the United States’s largest trade partner. Three companies that maintain operations or assets in Mexico have signed strategic cooperation agreements with the PLA Air Force. These agreements focus on building “systematic, structured, and fully integrated” (成系统、整建制、全覆盖) logistics systems that “transform military logistics into a bridge that converts national economic capacity into air force combat power” (将军事物流打造为国民经济向空军战斗力转化的纽带) (China Youth Daily, December 15, 2017). The three companies are Kerry Logistics (嘉里物流聯網) (now acquired by SF Express), YTO Express (圆通速递), and China Post Express & Logistics (中国邮政速递物流/中国速递). In 2021, SF Express gained control of two logistics companies in Mexico through its acquisition of Kerry Logistics (SF Holding Co., Ltd., March 28). In 2020, YTO Express—which, like SF Express, also has a department for military-civil fusion—launched a dedicated Mexico line (Sohu, January 8, 2019; Yuguo, January 8, 2020). In November 2024, China Post Express & Logistics issued a procurement announcement for setting up overseas institutions, including in Mexico, signaling continued expansion of its network (China Post, November 1, 2024).

YTO Express also works closely with Cainiao Smart Logistics Network (菜鸟网络科技; aka China Smart Logistics Network) to expand its network in Mexico (YTO Express, August 31, 2020). Cainiao, controlled by Alibaba, describes itself as the world’s largest provider of cross-border e-commerce logistics (Cainiao, accessed May 2). In March 2022, Cainiao established its first sorting center in Mexico (First Logistics, March 29, 2022). Since officially entering the Mexican market in early 2024, Cainiao has continued to increase investment in logistics infrastructure, including the construction of cargo terminals, port facilities, distribution centers, and overseas warehouses (Cainiao, March 24). Its distribution system now covers 20 Mexican states. The head of Cainiao, Wan Lin (万霖), is a board member of YTO Express. He is also a “specially invited representative” (特邀代表) at the Chinese People’s Political Consultative Conference (CPPCC), the central organization of the united front system (People’s Daily, June 12, 2021). He is a U.S. Green Card holder and an expert as part of the “National High-end Foreign Experts Recruitment Plan” (高端外国专家引进计), formerly the Thousand Talents Plan—another part of the united front system (MOST, January 26, 2019; YTO Express Group Co., Ltd., April 18, 2019). As part of the Party’s system of influence and control, these commercial logistics networks in Mexico may serve economic interests today but could serve the Party’s defense objectives in future, under the military-civil fusion framework.

Conclusion

The PRC’s push to globalize its logistics infrastructure through private companies is part of a strategy in which commercial expansion serves national defense. Framed publicly as efforts to stabilize trade and boost cross-border e-commerce, these initiatives are deeply rooted in the PRC’s military-civil fusion development strategy, which seeks to ensure that civilian assets can be mobilized for military use when needed. As PRC logistics firms continue to expand their presence abroad, their growing global footprint introduces new risks for host countries. Understanding the dual-use nature of these networks is essential for crafting policies that safeguard economic openness without compromising national security.

Notes

[1] Translation: “顺丰集团将积极响应国家军民融合发展战略，基于顺丰集团长期积累的供应链管理专业技术和能力，向军队、军工企业和社会客户提供面向特种物资和特殊应用场景的仓储物流、物资采购等供应链服务，助推军队采购