Landed cost 101: everything that hits your bill between the factory and your door

The price on your supplier’s invoice is not what your goods cost you. “Landed cost” is the real number: everything you pay to get a product from the factory to your door, ready to sell. Miss a piece and your margins are fiction. Here’s the whole stack.

The building blocks

1. Product cost — what you pay the supplier (the part everyone remembers).
2. International freight — ocean or air. Varies wildly with lane, season, and fuel.
3. Insurance — cargo insurance on the shipment.
4. Duty — a percentage of the customs value, set by your product’s HTS classification. This is the lever a good broker actually works (correct classification, first sale, free-trade agreements).
5. Special tariffs — on top of the base duty: Section 301 (China), Section 232 (steel/aluminum/ copper and derivatives), and whatever the current trade-policy environment adds. In 2026 these often dwarf the base duty. They stack.
6. Merchandise Processing Fee (MPF) — a CBP fee on formal entries (a small percentage of value, within a floor and ceiling).
7. Harbor Maintenance Fee (HMF) — on ocean shipments, a small percentage of value.
8. Customs brokerage fee — what you pay to have the entry filed correctly (ours is flat and published; watch for a separate duty-advance fee on other brokers’ invoices).
9. The last mile + the extras — drayage/trucking, warehousing, demurrage if cargo sits, any partner-agency (FDA/FCC/etc.) costs.

A simplified worked example

Say you import $50,000 of goods from China:

• Product: $50,000
• Freight + insurance: $4,000 (illustrative)
• Base duty at, say, 5%: $2,500
• Section 301 at 25%: $12,500 (this is often the biggest surprise)
• MPF + HMF: a few hundred dollars combined
• Brokerage: a flat fee (not a % of your duty)

Your landed cost isn’t $50,000 — it’s north of $69,000 before you’ve trucked it off the port. The tariffs, not the product, moved the number. That’s exactly why classification and trade strategy matter so much right now: they’re the only levers that legally move the biggest line.

Two things that quietly wreck the number

• The wrong HTS code. It sets your duty rate. Wrong code, wrong rate, every single shipment.
• The duty-advance fee. Many brokers add 2–5% of the duty just to front it to CBP. On the example above, 3.5% of ~$15k in duty is another ~$525 per entry — avoidable entirely by paying CBP directly.

Know the number before you ship

The worst time to discover your landed cost is after the goods arrive. Run it before you commit to a supplier or a price — it changes sourcing decisions, pricing, and which products are even worth importing.

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Want to see your real landed cost, with the current tariffs stacked the way CBP actually calculates them? Try our free tariff simulator at borderless.us/tariff-simulator — it pulls live duty rates. And if you want a second look at whether your classification is costing you, that’s a conversation we’re always happy to have.

Sources & further reading

• U.S. International Trade Commission — Harmonized Tariff Schedule
• CBP — Basic Importing and Exporting
• Borderless — free tariff & landed-cost simulator