Key takeaways
- Landed cost per unit = (goods + freight + insurance + duty + fees + local charges) ÷ units.
- EU and UK: duty on the CIF value. US: duty on the transaction value, without international freight and insurance.
- US fees for FY2026: MPF 0.3464% of value (minimum $33.58, maximum $651.50) on formal entries, and HMF 0.125% on sea shipments.
- Import VAT in the EU and UK is usually recoverable for a VAT-registered business: a cash-flow cost, not a margin cost.
- Check additional duties, such as US Chapter 99 measures, on top of the general rate for your code.
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What goes into landed cost
Landed cost is everything you pay to get a product to your warehouse, per unit. It is the number that decides whether a supplier, or a country, is really cheaper.
| Cost element | Notes |
|---|---|
| Goods value | The supplier’s price for the agreed Incoterms® rule |
| Origin charges | Inland haulage to port, export clearance, loading (if not in the price) |
| International freight | Ocean or air, plus surcharges |
| Insurance | Cargo insurance, typically on 110% of the CIF value |
| Import duty | Rate for your code and origin × the right duty base |
| Customs fees | US MPF and HMF; broker fees in all markets |
| Destination charges | Terminal handling, delivery order, drayage or delivery to warehouse |
| Import VAT or GST | Usually recoverable; a cash-flow item |
| Other costs | Inspection, testing, compliance and financing, if you want the full picture |
The free landed cost calculator applies these rules for the EU, UK and US.
The duty base: CIF in the EU and UK, transaction value in the US
This is the single most common error in landed cost models.
EU. Duty is charged on the customs value. Under the Union Customs Code, this is normally the transaction value plus the cost of transport and insurance to the point of entry into the EU. In practice, that is the CIF value at the EU border.
UK. The same principle: freight and insurance to the UK border are part of the customs value.
US. Duty is charged on the transaction value, which excludes international freight and insurance. In practice, that is close to the FOB value at the port of export.
The result: the same freight rate raises your duty bill in Rotterdam or Felixstowe but not in Los Angeles. When freight is expensive, the difference is material.
US fees: MPF and HMF
US imports carry two user fees on top of duty.
| Fee | Rate (FY2026) | Applies to |
|---|---|---|
| Merchandise Processing Fee (MPF) | 0.3464% of value, minimum $33.58, maximum $651.50 per entry | Formal entries |
| Harbor Maintenance Fee (HMF) | 0.125% of value | Cargo through US seaports; not air |
MPF has a cap, so on high-value entries it matters less; on low-value formal entries the $33.58 minimum can exceed the percentage. Both are calculated on the value of the goods, not including international freight.
Import VAT in the EU and UK
EU import VAT is charged on the customs value plus duty, plus incidental costs such as transport to the first place of destination in the importing country. UK import VAT works in a similar way at 20% standard rate. A VAT-registered business normally reclaims it, so most importers leave it out of the landed cost per unit and plan for the cash. If you cannot reclaim it, for example because you are not registered, include it in full.
Additional duties and preferences
The general (most-favoured-nation) rate is only the starting point.
- US additional duties. Measures under Chapter 99 of the HTS, such as Section 301, Section 232 and other additional duties, can apply on top of the general rate, depending on origin and product. Check them for your exact code before modelling.
- Preferential rates. Trade agreements and preference schemes can reduce or remove duty if the goods qualify under the rules of origin, and you hold the right proof of origin.
- Anti-dumping and countervailing duties apply to specific products from specific countries and can be very large. Check them for metals, chemicals and some consumer goods.
Find your code and the US general rate with the HS code finder; for the method, see HS codes explained.
Worked example: one shipment, two markets
5,000 plastic kitchen storage sets, supplier price $8.00 FOB (US) or €8.00 FOB (EU) per set, shipped in one 20-foot container. Freight to port of entry 3,200 and insurance 120 in each currency. The US general rate for plastic kitchenware “other” (HTS 3924.10.40) is 3.4%. For the EU we use an example rate of 6.5%: look up your CN code in TARIC. Local charges are illustrative.
United States
| Line | Working | USD |
|---|---|---|
| Goods (transaction value) | 5,000 × $8.00 | 40,000.00 |
| Ocean freight and insurance | Not dutiable | 3,320.00 |
| Duty | 3.4% × $40,000 | 1,360.00 |
| MPF | 0.3464% × $40,000 (inside min and max) | 138.56 |
| HMF | 0.125% × $40,000 | 50.00 |
| Customs broker | Illustrative | 150.00 |
| Drayage and delivery | Illustrative | 900.00 |
| Landed cost | 45,918.56 | |
| Per set | ÷ 5,000 | $9.18 |
European Union (Netherlands)
| Line | Working | EUR |
|---|---|---|
| Goods | 5,000 × €8.00 | 40,000.00 |
| Freight and insurance to EU border | 3,320.00 | |
| Customs value (CIF) | 43,320.00 | |
| Duty | 6.5% × €43,320 (example rate) | 2,815.80 |
| Terminal and port charges | Illustrative | 450.00 |
| Customs clearance | Illustrative | 150.00 |
| Delivery to warehouse | Illustrative | 700.00 |
| Landed cost excluding VAT | 47,435.80 | |
| Per set | ÷ 5,000 | €9.49 |
| Import VAT (recoverable) | 21% × (€43,320 + €2,815.80 + €450 + €700) | 9,930.02 |
Freight alone adds €215.80 of EU duty (6.5% × €3,320) that a US importer does not pay on the same freight.
Landed cost for a mixed shipment
Most containers carry more than one product. Build the calculation per SKU, not per shipment:
- Duty per line. Each SKU has its own code and rate, so calculate duty line by line on each line’s duty base.
- Freight and local charges by the carrier’s measure. Allocate by cubic metres for light, bulky goods and by weight for heavy goods, matching how the freight was charged.
- Fees in proportion to value. MPF and HMF are value-based, so allocate them by each line’s share of value.
- Fixed costs across units. Broker fees, inspection and delivery are spread across all units, usually by value or volume.
Keep the model as a template and update it with actual invoices after each shipment. The gap between your estimate and the actual landed cost is the best early warning you have that freight, duty or fees have moved.
Getting the freight line right
Freight is often the most volatile line. A few habits help:
- Know your cubic metres. Carton size and count drive LCL cost and container fit. Use the CBM calculator and the container and pallet load calculator.
- Compare FCL and LCL properly. Below a certain volume, LCL is cheaper; above it, a full container wins even half empty. The FCL vs LCL calculator finds the break-even point.
- Match the Incoterms rule to who controls freight. On FOB or FCA you book the freight and see the real cost; on CIF or DAP it is inside the supplier’s price. See Incoterms 2020 for importers or ask the Incoterms advisor.
Common mistakes
- Duty on the wrong base. CIF for the EU and UK, transaction value for the US.
- Forgetting additional duties. The general rate may be only part of the duty.
- Treating recoverable VAT as cost, or unrecoverable VAT as recoverable.
- Averaging freight across products with very different volumes. Allocate by cubic metres or weight, whichever the carrier charges on.
- Comparing a CIF quote with an FOB quote. Put every quote on the same basis first; the quote comparison tool does it for you.
Free tools for this guide
Sources
- US CBP: user fees (MPF and HMF)www.cbp.gov/trade/basic-import-export/user-fees
- 19 U.S.C. 1401a: transaction valuewww.law.cornell.edu/uscode/text/19/1401a
- Regulation (EU) No 952/2013, Union Customs Code, Art. 70–71eur-lex.europa.eu/eli/reg/2013/952/oj
- Council Directive 2006/112/EC (VAT Directive), Art. 85–86eur-lex.europa.eu/eli/dir/2006/112/oj
- GOV.UK: valuing imported goods for customs dutywww.gov.uk/guidance/how-to-value-your-imports-for-customs-duty-and-trade-statistics
- US International Trade Commission: Harmonized Tariff Schedulehts.usitc.gov
Checked on 28 September 2026. Rules and rates change: confirm against the official text before you act. This guide is general information, not legal or tax advice.