How to Calculate Your Real Landed Cost (Not Just FOB + Duty)
Most importers underestimate landed cost by 15–40%. The gap isn't the duty rate — it's the fees, surcharges, and costs that never show up in a simple FOB + duty calculation.
The Full Landed Cost Formula
Landed Cost = Product value (FOB/CIF) + International freight + Marine/cargo insurance + Base HTS duty + Section 301 surcharge (if applicable) + Section 232 surcharge (if applicable) + Section 122 surcharge (if applicable) + AD/CVD duties (if applicable) + Merchandise Processing Fee (MPF) + Harbor Maintenance Fee (HMF) + Customs broker fees + Inland freight / drayage + Warehousing (if applicable)
The Costs Most People Miss
1. Merchandise Processing Fee (MPF)
CBP charges 0.3464% of the declared value on every formal entry, with a minimum of $31.67 and a maximum of $614.35. On a $100K shipment, that's $346. Small but it adds up across dozens of entries per year.
2. Harbor Maintenance Fee (HMF)
0.125% of the value of cargo arriving at US ports by vessel. Only applies to ocean shipments, not air freight. On $100K that's $125.
3. Marine Insurance
Typically 0.5–1.5% of product value, depending on the commodity and route. Many importers skip this, but if your container falls off a ship (it happens more than you'd think), you're eating the entire loss.
4. The Duty-on-Duty Problem
When multiple tariff programs stack (e.g., base duty + Section 301 + Section 232), each is calculated on the customs value independently. They don't compound on each other, but importers sometimes calculate them sequentially, which understates the total.
5. Customs Broker Fees
$150–$300 per entry is typical. If you're doing 50+ entries per year, that's $7,500–$15,000 in broker fees alone. Factor this into your per-unit cost.
Worked Example: Electronics from Vietnam
HTS 8471.30.01 — Laptop computers from Vietnam
| Product value (FOB) | $250,000 |
| Ocean freight (FCL) | +$4,200 |
| Marine insurance (0.8%) | +$2,000 |
| Base HTS duty (0%) | $0 |
| Section 301 | N/A (Vietnam) |
| MPF (0.3464%, max $614) | +$614 |
| HMF (0.125%) | +$320 |
| Customs broker | +$200 |
| Drayage to warehouse | +$800 |
| Total landed cost | $258,134 |
Compare that to the same product from China, where Section 301 could add $62,500 (25%) — pushing the effective rate to over 28%. Compare side-by-side →
Common Mistakes
- Using FOB instead of CIF as the duty base. US customs calculates duty on FOB value (unlike most countries that use CIF). This actually works in your favor — but you need to know the difference.
- Forgetting MPF and HMF. Small percentages, but they apply to every single entry.
- Not checking for tariff program overlap. A product can be subject to base duty, Section 301, Section 232, AND AD/CVD simultaneously.
- Assuming the supplier's HTS code is correct. Suppliers guess. Brokers verify. Always confirm the classification independently.