Landed cost: what it includes and how to work it out

For goods imported into the United States, the landed cost of a shipment is the sum of:

• The goods: the supplier’s price, plus packing and anything else you pay for them.
• Freight: collection, export clearance, the main sea or air leg and delivery, as your Incoterm splits them. See Incoterms.
• Insurance, if you buy it.
• Duty: the rate for the goods’ HTS code and origin, applied to their customs value, plus any additional duties on that origin.
• Customs fees: the Merchandise Processing Fee, and the Harbor Maintenance Fee on goods arriving by sea.
• The customs broker’s fee and the bond. See customs bond.
• Destination charges: terminal handling, drayage, storage, and any demurrage or detention.

Duty is not charged on everything you pay. US customs values goods at their transaction value: the price paid for them when sold for export to the United States, plus some additions such as packing and selling commissions. The cost of international freight and insurance to the US is left out of that value by law, so the duty rate applies to the goods, not to the freight.

The fees CBP charges on top of duty, for fiscal year 2027 (from 1 October 2026):

• Merchandise Processing Fee on formal entries: 0.3464% of the value, at least $34.58 and at most $670.86 per entry.
• Merchandise Processing Fee on an automated informal entry: $2.77.
• Harbor Maintenance Fee: 0.125% of the value of cargo unloaded from a commercial vessel at a covered port, with some exemptions. Air freight does not pay it.

A worked layout, with your own figures in place of the letters:

1. Goods: G, the invoice total.
2. Freight and insurance: F, from your forwarder’s quote.
3. Duty: G × the duty rate for the code, plus any additional duty.
4. MPF: G × 0.3464%, kept between the minimum and the maximum. HMF on sea freight: G × 0.125%.
5. Broker, bond and destination charges: D.
6. Landed cost = G + F + duty + MPF + HMF + D. Divide by the units in the shipment for the landed cost per unit.

Under DDP the carrier pays duty and fees and puts them in its price, so one number covers freight, customs and duty. That is simpler, but harder to check. On Ebbrate every duty paid bid shows duty on its own line, and the DDP calculator splits any quote into duty and the carrier’s own charge.

• Leaving out the MPF and harbor fee, or the broker and bond.
• Charging duty on the freight as well as the goods.
• Using last year’s fee table: the MPF limits change every 1 October.
• Forgetting demurrage when a container waits at the port. See demurrage vs detention.
• Dividing by units ordered rather than units that arrived sellable.