Landed Cost Calculator

How the landed cost is built

Landed cost is not a single formula — it is a stack of costs, and each one attaches to a different customs value. This calculator assembles them in the order a customs broker would.

1. Goods at the stated Incoterm. An EXW quote excludes everything from the factory gate onwards, so inland haulage, export declaration, origin THC and documentation are added to reach FOB. A FOB quote already includes them. A CIF quote includes freight and insurance, so we back both out to recover FOB — using the Incoterms convention that insurance is charged at 110% of the CIF value.
2. Freight and insurance. Freight is entered in whatever currency the forwarder quoted, then converted before it touches any duty calculation. Insurance is premium = CIF × 1.1 × rate, which is why the CIF value itself depends on the premium.
3. Customs value. FOB for the US, Canada, Mexico and South Africa; CIF for the EU, UK, Australia, Japan, India, the GCC and most of Africa. This is the step most spreadsheet costings get wrong.
4. Duty and additional tariffs. Reference MFN rate at chapter level, plus whatever programme applies to your product — Section 301 for China-origin US imports, anti-dumping for specific lines, safeguards. Enter the extra rate yourself so the total never hides a known surcharge.
5. Statutory fees. Market-specific: US MPF (0.3464%, floor and ceiling per entry) and HMF (0.125%, ocean only), Nigeria's CISS and ETLS, Kenya's IDF and RDL, India's Social Welfare Surcharge, Brazil's AFRMM. Each is applied to its own base, not lumped together.
6. Import VAT. Charged on the duty-paid value plus delivery. It is only a cost if you cannot reclaim it — on a 19–23% VAT market that single toggle can move the total by a third.

Worked example

A Guangzhou supplier quotes FOB $12,500 for 1,000 units, ocean freight to Los Angeles is $2,400, and the goods are HS chapter 33 cosmetics shipping to the United States:

Notice what dominates: not the duty, which is zero on this chapter, but freight and domestic handling at 21% of the goods value. A seller who prices off the FOB number and adds "about 15% for shipping" loses $2 per unit before the first sale.

Where the number usually goes wrong

Freight left out of the customs value where it belongs. On CIF-basis markets, dropping freight understates duty directly and understates the VAT base on top of it.

Import VAT treated as cost when it is recoverable. This is the most common overstatement. A VAT-registered EU importer who builds 21% into the cost price is pricing 21% above the market.

Additional tariffs forgotten. A reference MFN rate is not the rate you pay if your product sits on a Section 301 list or an anti-dumping order. Always add the programme rate explicitly.

After you have the landed cost

This number is the input to two other decisions: what you can charge (use the margin calculator) and how much cargo fits in the container you are paying for (use the container loading calculator). If you are still comparing Incoterms with your supplier, the FOB/CIF ladder shows the same shipment priced at every handover point.