QUICK ANSWER Landed cost is the total cost of an imported unit delivered to your dock: product, freight, duty and Section 301, MPF and HMF, insurance, clearance, and inland delivery, divided by units. On imports from Asia it typically runs 20 to 50 percent above the supplier's FOB price. Price off that number, not the invoice.
Landed cost is the true price of an imported unit once it reaches your receiving dock: product, freight, duty, insurance, and every fee in between. Roughly six inputs, one number, and it is the only number pricing should ever be built on. Importers who price off the supplier invoice alone routinely discover that the missing 20 to 50 percent was their margin.
What the number includes, and where it stops
Everything it takes to get a unit from the factory to your dock, and nothing after. Inbound freight, duty, brokerage, drayage: in. Outbound shipping to your customer, pick and pack, storage after receipt: out, those are fulfillment costs. The line matters because landed cost is not an expense when you pay it. It is capitalized into inventory, sits on your balance sheet as an asset, and only hits the P&L as cost of goods sold when the unit sells.
The landed cost formula
Product cost + freight + duty and tariffs + insurance + clearance and fees + inland delivery = landed cost. Divide by units and you have the number that decides pricing, channel margins, and whether a product is worth importing at all. The arithmetic is easy. The work is knowing every input before the invoice arrives, which is what the component table below is for.
Landed cost components at a glance
| Component | What it covers | How it is charged | Typical basis (2026) |
|---|---|---|---|
| Product (FOB) | Goods plus origin charges through vessel loading | Supplier commercial invoice | Your negotiated price |
| Ocean or air freight | Base rate plus BAF, PSS, and GRI surcharges | Per container (FCL) or per CBM/ton (LCL) | Quote, moves with the market |
| Duty | HTS rate applied to the customs value | Percent of FOB value | 0 to 37.5%+ by HTS code |
| Section 301 | China-origin tariff stacked on duty | Percent of FOB value | 7.5% to 25% |
| MPF | CBP Merchandise Processing Fee | 0.3464% of entered value | Min $33.58, max $651.50 per entry |
| HMF | Harbor Maintenance Fee, ocean only | 0.125% of value | Ocean imports, no cap |
| Cargo insurance | All-risk cover on declared value | Percent of CIF value | Roughly 0.3% to 0.5% |
| Clearance and bond | ISF, entry, continuous bond | Flat fees | Bond $400 to $600 per year |
| Drayage and delivery | Port to door, chassis, final mile | Per move | Plus demurrage and per-diem risk |
Every component, itemized
Product cost
The FOB value on your commercial invoice, goods plus origin charges through vessel loading. This number is also the customs value duty gets calculated on, so it has to be right. What a FOB price does and does not include is covered in our FOB price explainer.
Main freight and surcharges
The base rate plus the surcharges that travel with it: bunker adjustments, peak season surcharges, general rate increases. An ocean freight quote that looked fixed in January can carry a GRI by March, which is why the freight line in a landed cost model needs a range, not a single number.
Duty and Section 301 tariffs
Duty is the HTS rate for your product applied to the FOB value, and for most Chinese-origin goods a Section 301 tariff of 7.5 to 25 percent stacks on top of it. Classification is a lever here, not a formality: the difference between two plausible HTS codes can be several margin points, which is what customs compliance review exists for.
MPF and HMF
Two federal fees most estimates forget. The Merchandise Processing Fee is 0.3464 percent of entered value, floored at $33.58 and capped at $651.50 per entry for 2026. The Harbor Maintenance Fee adds 0.125 percent of value on ocean shipments, with no cap. Small on one carton, real on a full container, and both are duty-paid at entry alongside your tariffs.
Insurance
Carrier liability is capped at $500 per package under COGSA, so real protection means cargo insurance on declared value. The premium is small against the invoice value it protects and belongs in the landed cost math from the start.
Clearance, bond, and fees
ISF filing, customs entry, and the continuous bond, which runs $400 to $600 a year, plus terminal and documentation fees on both ends. Each fee is small. Together they are a real line item, and a CBP exam can add storage and handling charges nobody quoted.
Drayage and final delivery
Port to door trucking, chassis fees, and the demurrage and per-diem exposure sitting behind them. These charges land after the goods arrive, which is exactly why estimates that stop at "freight plus duty" come in low.
A worked example: 2,000 units LCL from Shanghai
Round numbers, real line items. 2,000 units at $5.00 FOB Shanghai is a $10,000 invoice, moving LCL. Duty runs at an HTS rate of 3.4 percent, with a 7.5 percent Section 301 tariff on top, both on the $10,000 customs value.
Landed cost, 2,000 units from Shanghai (LCL)
| Line item | Amount | Per unit |
|---|---|---|
| Product cost (FOB) | $10,000.00 | $5.00 |
| Ocean LCL freight and surcharges | $2,400.00 | $1.20 |
| Duty at 3.4% | $340.00 | $0.17 |
| Section 301 at 7.5% | $750.00 | $0.38 |
| MPF at 0.3464% | $34.64 | $0.02 |
| HMF at 0.125% | $12.50 | $0.01 |
| Cargo insurance | $120.00 | $0.06 |
| Clearance, ISF, bond share | $550.00 | $0.27 |
| Drayage and delivery | $700.00 | $0.35 |
| Landed cost | $14,907.14 | $7.45 |
The unit that looked like a $5.00 buy lands at $7.45, roughly 49 percent above the invoice. Price this SKU off the $5.00 and you have given away every point of that gap.
A second example: a 40HC container from Vietnam
Same math, different origin, and the origin is the whole lesson. 600 units of wooden furniture at $40.00 FOB Ho Chi Minh City is a $24,000 invoice in one 40-foot high cube. The furniture classifies duty-free under its HTS heading, and because the goods are Vietnamese, no Section 301 tariff applies.
Landed cost, 600 units from Ho Chi Minh City (FCL)
| Line item | Amount | Per unit |
|---|---|---|
| Product cost (FOB) | $24,000.00 | $40.00 |
| Ocean FCL freight and surcharges | $3,800.00 | $6.33 |
| Duty (HTS free) | $0.00 | $0.00 |
| Section 301 | $0.00 | $0.00 |
| MPF at 0.3464% | $83.14 | $0.14 |
| HMF at 0.125% | $30.00 | $0.05 |
| Cargo insurance | $180.00 | $0.30 |
| Clearance, ISF, bond share | $550.00 | $0.92 |
| Drayage and delivery | $900.00 | $1.50 |
| Landed cost | $29,543.14 | $49.24 |
This unit lands at $49.24 on a $40.00 buy, about 23 percent over invoice, half the markup of the Shanghai example. Nothing about the freight or handling changed much. The gap is duty and Section 301, which is why sourcing origin and HTS classification move landed cost more than shaving a freight quote ever will.
What changed for landed cost in 2026
The formula is stable. The inputs are not. Three shifts are worth pricing in this year. Section 301 tariffs on Chinese-origin goods remain in force across the original lists and have been extended and adjusted rather than lifted, so a China buy still carries the 7.5 to 25 percent stack the Vietnam buy does not. The MPF minimum and maximum reset for the federal fiscal year: for 2026 the cap sits at $651.50 per entry, which matters most on high-value, single-entry shipments. And the low-value de minimis path that once let sub-$800 parcels skip formal entry has been tightened, so goods that used to slip in duty-free may now owe duty, MPF, and a formal entry. If your model still runs on last year's rates, it is quietly wrong.
How to calculate landed cost per unit, step by step
Take the Shanghai example above and read it top to bottom: total every line, then divide by units. On a mixed container, allocate the shared costs before dividing: freight and drayage usually by volume or weight, duty by each SKU's own value and rate, flat fees by value or evenly. Spreadsheets and QuickBooks handle this at small scale; ERPs let you pick the allocation base per cost line, which is where most importers move once SKU count grows.
To estimate before you book, price each line from quotes and the HTS schedule rather than history: the supplier's FOB price, a current freight quote, your duty rates, MPF and HMF, and standing fees. The estimate will not be perfect. It only needs to be closer than "invoice plus shipping".
Landed cost vs FOB price and COGS
A FOB price and a landed cost describe two ends of the same journey: FOB is what the goods cost loaded on the vessel, landed cost is what they cost on your dock. Comparing supplier quotes on FOB alone rewards whoever is closest to a cheap port, not whoever is cheapest to you.
Against COGS, the relationship is sequence, not synonym. Landed cost goes into inventory value when goods arrive; it becomes cost of goods sold when they sell. Get landed cost wrong and COGS, margin reports, and pricing are wrong downstream, quietly, for as long as the error lives.
Where import cost estimates go wrong
The misses are predictable, and most of them arrive after the supplier quote is long forgotten.
The charges that break a landed cost estimate
| Surprise charge | What triggers it | Rough exposure |
|---|---|---|
| Demurrage | Container sits at the terminal past free days | $150 to $300+ per day, per container |
| Per-diem | Chassis or container held past free time | $50 to $150+ per day |
| CBP exam | Random selection or a flagged entry | $200 to $1,000+ plus lost days |
| ISF penalty | Late or inaccurate ISF filing | Up to $5,000 per filing |
| GRI or PSS | Market timing between quote and sailing | Varies by lane |
| Currency swing | A EUR or RMB-priced invoice | FX movement on the whole buy |
None of these appear on a supplier quote, and all of them are why a landed cost model carries a contingency line, typically a few percent, until your lane history says otherwise. The same misses push delivery dates, so inventory planning inherits the error too.
How importers cut the cost per unit
The levers are structural, not heroic. Consolidate LCL shipments into fuller containers or a buyer's consolidation program. Get classifications reviewed and recover overpaid duty through drawback where it applies, both customs compliance territory. Defer duty with bonded warehouses and FTZs when goods re-export or sales timing is uncertain. Compare lanes and ports with drayage and dwell realities included, not just the ocean rate. And kill the surprise charges, which cost more than most rate negotiations save.
How Platton helps you control landed cost
Most landed cost surprises are not math errors. They are visibility errors: a fee nobody quoted, a classification nobody checked, a container nobody cleared in time. Platton runs the whole import as one file for US importers, so the number you plan margins on is the number that shows up.
One itemized quote, every line in it
Freight, duty and Section 301 exposure, MPF and HMF, clearance, and drayage on a single sheet before you book. An itemized quote is a landed cost estimate someone else did for you, and it is the fastest way to stop pricing off "invoice plus shipping".
Classification reviewed before entry, not after
A wrong HTS code found at the border means duty recalculated upward and time lost. Our customs compliance review checks the code against your product before the entry files, where the difference is worth real margin points.
Consolidation and duty deferral where they pay
Fuller containers through buyer's consolidation, and duty deferred through bonded warehouses or an FTZ when re-export or sales timing makes it worth it. Both cut cash tied up in landed cost, not just the sticker.
One owner on demurrage and per-diem
The charges that wreck estimates come from slow pickup and missed free time. When one team owns clearance and drayage, the container moves before the clock runs, and the demurrage line stays near zero.
Lane-level cost detail for the main corridor lives in our shipping from China to USA guide.
Common Questions About Landed Cost
What is the landed cost formula?
Product cost + freight + duty and tariffs + MPF and HMF + insurance + clearance fees + inland delivery, divided by units for the per-unit figure. The component table above tells you what belongs in each bucket and how each one is charged.
Does landed cost include shipping to the customer?
No. Landed cost ends at your receiving dock. Outbound shipping, fulfillment, and storage after receipt are operating costs, not landed cost, and mixing them in corrupts both numbers.
Are FOB price and landed cost the same?
No. FOB is the invoice price with the goods loaded at the origin port; landed cost adds freight, duty, fees, insurance, and delivery, typically 20 to 50 percent or more on top for Asia imports. Quotes should be compared landed, not FOB.
Does a DDP price already include landed cost?
Close, but read it carefully. A DDP quote bundles freight, duty, and delivery to your door, which covers most landed cost lines. It does not automatically include cargo insurance or your own internal handling, and the duty inside it is only as accurate as the classification behind it. Treat DDP as a landed cost estimate you should still check line by line.
How do COGS and landed cost differ?
Landed cost is what a unit costs to get to your dock; COGS is what leaves inventory when that unit sells. Landed cost feeds COGS, so an error in the first quietly misstates the second all year.
How do I split shared costs across SKUs?
Allocate shared costs across the shipment, freight by volume or weight, duty by value and rate, flat fees by value, then divide each SKU's total by its units. The worked examples above show the full pass.
Can I do this in Excel or QuickBooks?
At low SKU counts, yes, and most importers start there. The breaking points are allocation on mixed containers, currency movement, and tariff changes, which is when an ERP or a landed cost tool with per-line allocation bases earns its keep.
Related Freight Forwarding Guides
FOB shipping point vs FOB destination: the price your landed cost starts from.
What a freight forwarder does for US importers: the role that manages most of these cost lines.
Mitigating tariff impact with bonded warehouses and FTZs: where duty deferral cuts the landed number.
