What Is Landed Cost? A Guide for Importers and Logistics Companies

By Dr. Shirley Ayangbah, Founder and Lead Strategist, Global Economic Research Consulting (GERC)

Landed cost is the total cost of getting a product to your door: the price you paid the supplier plus freight, insurance, duties, customs fees, brokerage, drayage, storage and handling. In other words, it is the number you should build your pricing on. Yet many importers, freight forwarders and e-commerce sellers still quote and price from the supplier invoice, and the gap between the two numbers can easily be 20 percent or more.

This guide explains what goes into landed cost, walks through a worked example for a shipment into the Port of Los Angeles, and shows why the tariff changes of 2025 and 2026 make getting it right more important than ever.

What is landed cost?

Landed cost is the full, per-unit cost of a product once it has arrived where you can sell or use it. It answers a simple question: what does this item really cost me? If you know the landed cost, you can set prices that protect your margin, compare suppliers and sourcing countries fairly, and quote clients with confidence.

What goes into landed cost

• Product cost: the price paid or payable to the supplier, which suppliers usually quote FOB (free on board) at the origin port.
• International freight: ocean or air freight from the origin port to the U.S. port of entry, plus any fuel or peak-season surcharges.
• Insurance: cargo insurance for the international leg.
• Customs duties and tariffs: based on the product’s Harmonized Tariff Schedule (HTSUS) classification, its country of origin and any additional tariffs in force when it enters.
• Merchandise Processing Fee (MPF): 0.3464% of the entered value on formal entries. For fiscal year 2027 (from October 1, 2026), the minimum is $34.58 and the maximum is $670.86 per entry.
• Harbor Maintenance Fee (HMF): 0.125% of the cargo value, which CBP charges only on goods arriving through U.S. ocean ports.
• Customs brokerage: the fee your licensed customs broker charges to prepare and file the entry.
• Drayage and inland freight: moving the container from the port to your warehouse or customer.
• Storage and handling: warehouse receiving, storage, pick-and-pack, and any demurrage or detention charges if containers are not returned on time.

How U.S. customs value works (and why it matters)

The United States generally charges duty on the transaction value of the goods, which is the price actually paid or payable to the seller. In most cases, that dutiable value does not include international freight and insurance, unlike countries that charge duty on a CIF basis. However, you may need to add some costs, such as assists, royalties, selling commissions and packing, to the value. Getting this right therefore affects both your duty bill and your compliance, so confirm the details with your customs broker.

A worked landed-cost example

For example, consider this illustrative shipment. An importer buys 1,000 LED light fixtures from a supplier in Shenzhen at $20.00 each, FOB, and ships one container into the Port of Los Angeles. The duty rate below is a placeholder for illustration only; the real rate depends on the product’s classification and the tariffs in force on the day of entry.

Cost item	Calculation	Amount
Product (FOB Shenzhen)	1,000 units × $20.00	$20,000.00
Ocean freight and insurance	Forwarder quote	$2,400.00
Duties and tariffs (illustrative 10%)	10% × $20,000 customs value	$2,000.00
Merchandise Processing Fee	0.3464% × $20,000	$69.28
Harbor Maintenance Fee	0.125% × $20,000	$25.00
Customs brokerage	Broker fee (example)	$150.00
Drayage and warehouse handling	Port to Inland Empire warehouse	$900.00
Storage (first month)	Warehouse quote	$300.00
Total landed cost		$25,844.28
Landed cost per unit	$25,844.28 ÷ 1,000	$25.84

The supplier invoice says $20.00 per unit. The real cost is about $25.84, roughly 29% higher. As a result, a business that prices from the invoice instead of the landed cost could be giving away most of its margin without knowing it.

Why tariffs make landed cost harder in 2026

U.S. trade policy has changed repeatedly over the past two years, and each change flows straight into landed cost:

• The de minimis exemption is gone for most shipments. The U.S. suspended the $800 duty-free de minimis treatment for all countries on August 29, 2025, and federal law repeals it permanently from July 1, 2027. E-commerce sellers who once shipped small parcels duty-free now pay duties and fees on them.
• Tariff authorities have shifted. In February 2026 the Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized, and the administration has since imposed replacement tariffs under other trade laws. Importers who paid the earlier tariffs may be eligible for refunds through U.S. Customs and Border Protection, subject to deadlines.
• Tariffs can stack. A product can be subject to its normal duty rate plus additional tariffs under different laws at the same time, depending on what it is and where it was made.

Because rates and rules keep changing, always check the current HTSUS and CBP guidance, or ask your customs broker, before you lock in pricing. A landed-cost model is only as good as the tariff rate you put into it.

Five ways to lower your landed cost

1. Classify correctly. The right HTSUS code can change the duty rate significantly. For this reason, work with your broker to classify each product accurately.
2. Compare sourcing countries on landed cost, not unit price. After all, a supplier that is cheaper on the invoice can be more expensive once you add duties and freight.
3. Consolidate shipments. Fewer, fuller entries spread fixed costs like the MPF minimum and brokerage fees over more units.
4. Watch demurrage and detention. Similarly, late container returns can quietly add hundreds of dollars per box.
5. Review refunds and programs. Check whether the government owes you tariff refunds, and whether duty drawback, foreign-trade zones or free trade agreements apply to your goods.

Frequently asked questions

Is landed cost the same as COGS?

Not exactly. Landed cost is the cost of getting a product to you. Cost of goods sold (COGS) is an accounting figure that can also include production and other costs. Even so, landed cost is usually the biggest part of COGS for an importer.

Are freight and insurance included in the U.S. duty calculation?

Usually not. The U.S. generally charges duty on the transaction value of the goods, which excludes international freight and insurance. However, they are still part of your landed cost.

Who files the customs entry?

Either the importer of record itself or a licensed customs broker. GERC does not file customs entries; we provide the economic and tariff analysis that helps you plan pricing, sourcing and strategy, and we work alongside your broker or forwarder.

How often should I recalculate landed cost?

Every time a major input changes: a new tariff, a new freight rate, a new supplier or a new product. Because trade rules change so often, many importers now review it at least quarterly.

Get your landed cost calculated

GERC’s international trade and logistics consulting helps freight forwarders, trucking companies, warehouses and importers understand tariffs, calculate true landed costs and compare sourcing options. Tell us one product you import or ship regularly and we’ll send you a free one-page tariff & landed-cost brief. Prefer to talk? Call (909) 454-7076 or book a consultation.