How to calculate landed cost
Landed cost is the all-in cost of getting a shipment to your door and ready to sell. Get it wrong and every margin downstream is wrong. Here is the formula, the two decisions that move the number most, and a worked example you can copy.
Skip to the free landed cost calculator →
The formula
Landed cost = goods value
+ origin charges
+ international freight
+ cargo insurance
+ customs duty (dutiable value x tariff rate)
+ statutory entry fees (MPF, HMF or equivalent)
+ customs brokerage and bond charges
+ destination handling and delivery
+ accessorials (chassis, per diem, storage)
+ non-recoverable import tax
Per-unit landed cost = landed cost / unitsEverything above the accessorial line is quotable before you book. The accessorial line is not — it lands weeks later and is where most of the variance between planned and actual landed cost lives.
Decision one: FOB or CIF duty basis
The dutiable value is not always the goods value. US Customs assesses duty on the FOB price of the goods alone. The European Union, the United Kingdom, Canada and most other customs territories assess duty on the CIF value, which folds freight and insurance into the base.
On the worked example below, moving from an FOB to a CIF basis raises the dutiable value from $48,000.00 to $51,390.00 — about $142.38 of extra duty at the same 4.2% rate. On a lane you run weekly, that is a real number.
Decision two: is the tax a cost or a cash-flow item
Customs duty is never recoverable — it is a true cost of the goods. Import VAT or GST usually is recoverable for a registered business, so it should be funded at clearance but kept out of the cost of goods. Booking recoverable VAT into landed cost overstates unit cost and can make a profitable SKU look like a loser.
Worked example
A US importer buys 1,200 units for $48,000.00 FOB, ships one 40ft container, and clears at a 4.2% duty rate.
| Goods value (FOB) | $48,000.00 |
| Origin charges & export handling | $450.00 |
| Ocean freight | $3,200.00 |
| Cargo insurance | $190.00 |
| Customs duty (4.2% of $48,000.00) | $2,016.00 |
| Customs fees (MPF / HMF) | $180.00 |
| Brokerage, ISF & bond | $165.00 |
| Destination handling & delivery | $640.00 |
| Accessorials (chassis, per diem, storage) | $385.00 |
| Total landed cost | $55,226.00 |
| Per-unit landed cost | $46.02 |
Non-goods costs are 13.1% of the total here. Change any input in the calculator and share the resulting breakdown by link.
Where importers overpay
- Single-entry bonds on a repeat lane. Once you are filing regularly, a continuous bond is usually cheaper per entry — see continuous vs single-entry bonds.
- Duplicated surcharges. Congestion, peak season and bunker adjustments billed both in the freight rate and as separate lines. The surcharge decoder shows what each code should cover.
- Per diem billed from discharge. Free time starts at availability, not vessel discharge — check it with the demurrage calculator.
- Chassis and pre-pull stacking. Decoded in the accessorial reference.
Actual landed cost higher than your model?
Send us the freight and clearance invoices for one lane. We run a blind audit against the tariff and the contract and show you the difference line by line. You pay only on what we recover.
Run a free blind audit