How to Calculate Import Landed Cost
What is Import Landed Cost?
The Import Landed Cost Calculator computes the true total cost of bringing imported goods to your warehouse by summing the product cost, international freight, customs duties, insurance, port fees, and inland transportation.
Formula
Landed Cost = Product Cost + International Freight + Insurance + Customs Duties + Port/Handling Fees + Inland Transport
- FOB
- Free on Board Price ($) — Purchase price at the port of origin
- F
- Freight Cost ($) — International shipping charges
- I
- Insurance ($) — Cargo insurance premium (typically 0.3-0.5% of CIF)
- D
- Duty ($) — Customs duties and taxes assessed at import
- H
- Handling ($) — Port fees, brokerage, drayage, and inland transport
Step-by-Step Guide
- 1Start with the FOB (Free on Board) purchase price from the supplier
- 2Add international shipping costs (ocean, air, or multimodal freight)
- 3Add cargo insurance (typically 0.3-0.5% of CIF value)
- 4Calculate and add all customs duties, taxes, and broker fees
- 5Add port handling, drayage, and final delivery to your warehouse
Worked Examples
Input
FOB $10,000, ocean freight $1,200, insurance $56, duty 8% on CIF, broker $175, drayage $450
Result
CIF = $11,256, Duty = $900.48, Landed = $11,256 + $900.48 + $175 + $450 = $12,781.48
Common Mistakes to Avoid
- ✕Quoting FOB price as the landed cost and underestimating true procurement expense
- ✕Forgetting customs broker fees, terminal handling charges, and demurrage
- ✕Not including currency conversion fees or payment terms cost
Frequently Asked Questions
What is the difference between FOB and CIF?
FOB (Free on Board) means the buyer pays freight and insurance from the origin port. CIF (Cost, Insurance, Freight) means the seller covers those costs to the destination port. Both are Incoterms defining responsibility transfer points.
What percentage does landed cost typically add over FOB?
Landed cost usually adds 20-40% over FOB price depending on product weight, origin country, duty rates, and shipping method. Heavy or bulky goods and high-duty items can exceed 50%.