Landed Cost Calculator

The Landed Cost Formula

A supplier quote tells you what the goods cost. It does not tell you what they will cost when the cartons reach your dock. Between the factory and the shelf sit international freight, insurance, import duty, two user fees collected by U.S. Customs and Border Protection, a customs broker, and the truck that brings the container from the port to your door.

Landed cost = goods value + freight + insurance + duty + CBP fees + brokerage + inland delivery + other

Cost per unit = total landed cost / units in the shipment

Two habits keep the number honest. First, allocate every cost to the shipment, not to the invoice: a $150 brokerage fee on a 100 unit order is $1.50 a unit, and on a 1,000 unit order it is $0.15. Second, use the same cost everywhere. The landed cost per unit is the figure that belongs in your margin math, your reordering decision, and your books as the cost basis of the goods. A price set from the supplier quote alone underprices every unit in the container.

What CBP Uses as the Duty Base

Duty is a percentage, so the base matters as much as the rate. For U.S. imports, customs value is generally the transaction value: the price paid or payable for the goods, adjusted for packing, selling commissions, assists, and royalties. International freight and insurance are not part of it. That is the opposite of CIF customs regimes, where freight and insurance ride along in the duty base.

A $21,600 order with $2,400 of ocean freight and $180 of insurance therefore pays duty on $21,600, not $24,180. At 8.5 percent the difference is $219.30. The Merchandise Processing Fee and the Harbor Maintenance Fee use the same merchandise value, not the duty paid.

The rate itself comes from the Harmonized Tariff Schedule maintained by the U.S. International Trade Commission. General rates run from 0 percent on many raw materials to 30 percent or more on some finished goods, and additional duties for specific origins and programs are entered under Chapter 99 of the schedule on top of the general rate. Classification is a factual question about the item, so confirm the heading and the rate before you quote a customer a price.

Merchandise Processing Fee and Harbor Maintenance Fee

Two user fees land on most formal imports alongside duty.

Merchandise Processing Fee (MPF). For formal entries, CBP charges an ad valorem fee of 0.3464 percent of the merchandise value, subject to a floor and a cap. Under CBP Decision 26-14 (91 FR 48398), the limits for fiscal year 2027, required as of October 1, 2026, are a $34.58 minimum and a $670.86 maximum, with a $4.15 surcharge if the entry is filed manually. The rate itself is unchanged at 0.3464 percent.

Harbor Maintenance Fee (HMF). Cargo loaded or unloaded at a U.S. port pays 0.125 percent of the merchandise value under 19 CFR 24.24. It applies to ocean cargo only; air freight never pays it. There is no minimum or maximum.

The first and last rows show why both limits matter. On a $5,000 shipment the percentage math produces $17.32, but the floor lifts the bill to $34.58. On a $240,000 shipment the math produces $831.36 and the cap saves $160.50. Formal entries are generally required for shipments above $2,500; below that line an informal entry carries a flat fee of $2.77, $8.30, or $12.45 depending on how it is filed (CBP, FY2027 fee schedule). The current amounts are published on the CBP user fee table, and the HMF regulation lists the exemptions, which include certain cargo for Alaska, Hawaii, and the territories.

Worked Example: 1,200 Units From Shenzhen

A seller imports 1,200 units at $18.00 each. Ocean freight runs $2,400, cargo insurance $180, and the item carries an 8.5 percent duty rate. The customs broker charges $150, inland delivery from the port costs $420, and $60 covers labeling and inspection. The shipment arrives by vessel, so the HMF applies.

1. Goods value: 1,200 x $18.00 = $21,600.00.
2. Duty: $21,600.00 x 0.085 = $1,836.00, charged on the goods value alone.
3. MPF: $21,600.00 x 0.003464 = $74.82, between the floor and the cap.
4. HMF: $21,600.00 x 0.00125 = $27.00.
5. CBP fees together: $1,836.00 + $74.82 + $27.00 = $1,937.82.
6. Add the shipping costs: $2,400.00 freight + $180.00 insurance + $150.00 brokerage + $420.00 inland + $60.00 other = $3,210.00.
7. Total landed cost: $21,600.00 + $1,937.82 + $3,210.00 = $26,747.82.
8. Cost per unit: $26,747.82 / 1,200 = $22.29.
9. Premium over the supplier quote: $5,147.82 / $21,600.00 = 23.8 percent.

The quote said $18.00. The shelf cost is $22.29. If the seller had priced from the invoice, every unit would carry a hidden $4.29 of cost, and a 30 percent markup on the quote would not cover it.

Worked Example: A High-Value Shipment and the MPF Cap

A workshop brings in 40 units of equipment at $6,000.00 each by ocean, with an assumed duty rate of 3.1 percent. Freight is $4,800, insurance $900, brokerage $225, and inland delivery $650.

1. Goods value: 40 x $6,000.00 = $240,000.00.
2. Duty: $240,000.00 x 0.031 = $7,440.00.
3. MPF: $240,000.00 x 0.003464 = $831.36, which exceeds the $670.86 cap, so the fee charged is $670.86.
4. HMF: $240,000.00 x 0.00125 = $300.00.
5. Total: $240,000.00 + $7,440.00 + $670.86 + $300.00 + $4,800.00 + $900.00 + $225.00 + $650.00 = $254,985.86.
6. Cost per unit: $254,985.86 / 40 = $6,374.65.

Without the cap, the total would be $255,146.36 and the cost per unit $6,378.66, so the cap saves $160.50 on this single entry. Fees per unit here run $210.27 ($8,410.86 of duty and CBP fees across 40 units), which is a different world from the first example, where duty and fees cost $1.61 per unit. High-value, low-unit-count imports carry their government costs in concentrated lumps, and the per-unit figure makes that visible before pricing.

The Small Shipment Trap: Fixed Fees Per Entry

Fixed fees punish small orders hardest. Take 60 units at $4.50, a $270.00 order that happens to be duty free. Freight is $85 and the broker charges $45.

1. Goods value: 60 x $4.50 = $270.00.
2. Duty: $0.00.
3. MPF: 0.3464 percent of $270.00 is $0.94, but the $34.58 floor applies, so the fee charged is $34.58.
4. HMF: $270.00 x 0.00125 = $0.34.
5. Total: $270.00 + $34.58 + $0.34 + $85.00 + $45.00 = $434.92.
6. Cost per unit: $434.92 / 60 = $7.25.

The supplier quote tripled: $4.50 became $7.25, and CBP fees alone took 12.9 percent of the goods value even with no duty at all. At this size the honest comparison is against not importing at all. Buying domestic, consolidating several small orders into one formal entry, or using a freight forwarder's consolidation service can all beat paying a full entry's fixed costs on a few hundred dollars of goods. The calculator shows the floor and the cap in its output so the effect is visible on any shipment size.

Freight, Insurance, and Inland Costs in Practice

International freight rarely bills the way a flat quote suggests. Ocean LCL (less than container load) freight is charged per cubic meter or per 1,000 kg, whichever yields more, with a minimum. Air freight is charged per chargeable kilogram, where chargeable weight is the greater of actual weight and volumetric weight. Both modes carry minimum charges, surcharges, and peak season add-ons, so the freight line on a landed cost sheet deserves its own quote rather than a rule of thumb.

Cargo insurance commonly prices around 0.3 to 0.5 percent of the insured value, with minimum premiums for small shipments. In the first example, $180.00 on $24,000.00 of goods plus freight works out to 0.75 percent, which is on the high side and worth shopping. Insurance is optional in the formula, but a container lost without it turns a margin problem into a business problem.

Brokerage is a flat fee per entry in most cases, which is why it crushes small orders and barely registers on large ones. Inland delivery prices per container or per hundredweight depending on mode and distance. The $420.00 in the first example adds $0.35 to each of 1,200 units; the same truck fee on a 100 unit order would add $4.20. Every one of these lines should be divided by units before it reaches a pricing sheet, because per-shipment costs look harmless and per-unit costs decide margins.

From Landed Cost to a Selling Price

Landed cost is an input, and pricing is where it pays off. Keep two words straight: markup is a percentage of cost, margin is a percentage of the selling price. They produce different numbers from the same intent.

At a landed cost of $22.29:

45 percent markup: $22.29 x 1.45 = $32.32, a gross margin of 31.0 percent

45 percent margin: $22.29 / 0.55 = $40.53

The two prices are $8.21 apart. The margin version is the one that leaves 45 cents of every sales dollar after the goods are paid for, and it is what most owners mean when they say they want a 45 percent margin. Pricing from markup while thinking in margin is one of the quietest ways to miss a profit plan.

Landed cost also feeds the reorder decision. If a second supplier quotes $17.40 per unit but ships in smaller lots, the fixed fees spread across fewer units and the landed cost can land above the first supplier's $22.29. Compare suppliers on landed cost per unit, never on invoice price per unit.