Landed Cost

Landed cost is everything an importer pays to get goods from the supplier into its warehouse or store: the price of the goods plus every transport, insurance, customs and delivery cost along the way. It is a management figure, not a customs one, and it is what you compare suppliers and set selling prices on.

What goes into landed cost

• Product cost: the price paid to the supplier, including packing
• Origin charges: pickup, export clearance and loading, if your Incoterms rule puts them on you (for example under EXW)
• International freight: ocean or air freight, with its surcharges
• Cargo insurance: see cargo insurance
• Customs duties: the HTS duty rate, plus any additional duties that apply to the product or origin, such as Section 232 or Section 301 duties or antidumping and countervailing duties
• US customs fees: the merchandise processing fee (MPF) and, on ocean cargo, the harbor maintenance fee (HMF), 0.125 percent of the cargo's value under 19 CFR 24.24
• Brokerage and filings: the customs broker's entry fee, the customs bond and the ISF
• Destination charges: terminal and delivery-order charges, drayage or trucking to your door, and any demurrage or detention if the container sits too long

How the US values goods for duty

US duty is not charged on your landed cost. CBP appraises most imports at transaction value: the price actually paid or payable for the goods when sold for export to the United States, plus certain additions such as packing, selling commissions, assists and royalties (19 U.S.C. 1401a). The statute defines that price as exclusive of the costs of transportation, insurance and related services incident to the international shipment, and CBP's regulation (19 CFR 152.103) gives the example that transaction value excludes C.I.F. charges. So the duty base is broadly the value of the goods at the export point, closer to FOB than to CIF, whatever Incoterms rule you bought on.

Other countries choose differently. The WTO Customs Valuation Agreement leaves each member to decide whether freight, handling and insurance to the port of importation are included in customs value, and countries that include them charge duty on a CIF-type value. When you compare duty on the same goods at two destinations, check which basis each uses.

Common mistakes

• Leaving out additional duties that apply to the product's origin, which can outweigh the base rate
• Forgetting destination charges and drayage, which are billed separately from ocean freight
• Assuming duty is charged on the freight-inclusive price, or the reverse, when estimating for another country

Building a landed cost on Airlift's lanes

For duty, start with the product's code in the HTS code finder and estimate the duty and fees in the tariff simulator. For freight, ask us for a quote on your lane, such as India to USA or China to USA. Airlift handles the freight as an FMC-licensed NVOCC; the customs entry itself is filed by a licensed broker, which we coordinate through our customs clearance service.