How to Calculate Landed Cost: Import Duty, Freight, and Insurance Explained for B2B Importers

The Landed Cost Formula

Landed Cost = FOB Price + Ocean Freight + Marine Insurance + Customs Duty (per HTS rate) + MPF + HMF + Brokerage + Port Charges + Inland Freight. Each of these line items can vary by 20-50% depending on routing decisions, making landed cost calculation essential for accurate profit margin forecasting.

Duty Calculation by HTS Code

The customs duty is calculated on the CIF value (Cost + Insurance + Freight), not the FOB value. Example: FOB $10,000 + Freight $1,200 + Insurance $50 = CIF $11,250. If the HTS code carries a 5% General rate plus 25% Section 301: Duty = $11,250 x 30% = $3,375. Total landed = $11,250 + $3,375 + $500 (MPF+HMF+Brokerage) + $300 (Port) + $800 (Inland) = $16,225. Landed cost multiplier vs. FOB: 1.62x.

Hidden Costs Importers Miss

Merchandise Processing Fee (MPF): 0.3464% of entered value, minimum $29.66, maximum $575.35. Harbor Maintenance Fee (HMF): 0.125% of entered value for ocean freight only. Customs bond: $500-1,500/year for continuous bond. Exam fees: $200-500+ if CBP selects your container for VACIS/NII or intensive exam. Demurrage: $150-300/day if container not picked up within free days (typically 4-5 days at US ports).