Last updated: October 2026
Short answer: Landed cost is the total cost to get a product to your door. The formula is: landed cost = goods + international freight + insurance + duties and tariffs + customs fees + broker fees + inland delivery. For U.S. imports, duty is usually charged on the customs value (generally the price paid for the goods, without international freight and insurance). You then add the Merchandise Processing Fee (0.3464%, minimum $34.58, maximum $670.86 for formal entries from October 1, 2026) and, for ocean cargo, the Harbor Maintenance Fee (0.125%). Divide the total by the number of units to get landed cost per unit.
Why landed cost matters more in 2026
U.S. tariffs have changed several times this year. On February 20, 2026, the Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize tariffs. Other tariff actions followed under different laws. If your price is based on last spring’s duty rates, your margin may be off by several points. Rebuilding landed cost line by line is the safest way to price.
The landed cost formula, line by line
| Cost line | How to calculate it | Where to find the number |
|---|---|---|
| Goods (customs value) | Price paid to the supplier, plus certain assists and royalties | Commercial invoice |
| International freight and insurance | Actual quote | Forwarder or carrier |
| Duty (MFN rate) | Customs value × HTS rate | USITC Harmonized Tariff Schedule |
| Extra tariff layers | Customs value × each rate that applies (for example Section 232 or 301) | HTS Chapter 99 notes, CBP guidance, your broker |
| Merchandise Processing Fee (MPF) | 0.3464% of value, min $34.58, max $670.86 (formal entry) | Federal Register, FY2027 fees |
| Harbor Maintenance Fee (HMF) | 0.125% of value, ocean shipments only | CBP user fee table |
| Customs broker fee | Flat per entry, plus extras | Broker quote |
| Inland freight and drayage | Port or airport to your warehouse | Trucking quote |
A few rules trip people up:
- Freight usually isn’t dutiable. The U.S. generally values goods on a transaction basis that excludes international freight and insurance. Your landed cost still includes them.
- Origin isn’t the port you ship from. Duty depends on where the goods were made or substantially transformed.
- Tariff layers can stack. Some actions add on top of the MFN rate. Others exclude goods covered by a different action. Check each one.
- Informal entries are cheaper to file. Shipments valued at $2,500 or less can usually clear as informal entries, except articles over $250 classified in HTS Chapter 99, Subchapters III and IV (19 CFR 143.21). They pay a small flat MPF instead of the percentage: $2.77, $8.30, or $12.45 per entry, depending on how the entry is prepared (see the CBP user fee table).
Worked example: ocean shipment of 1,000 units
Suppose you import 1,000 kitchen gadgets by ocean. The rates below are for illustration only. Look up your own HTS code.
- Goods (customs value): $20,000
- Ocean freight: $1,800
- Cargo insurance: $120
- Duty: MFN 5% + an extra 10% tariff layer = 15% × $20,000 = $3,000
- MPF: 0.3464% × $20,000 = $69.28 (between the $34.58 minimum and $670.86 maximum)
- HMF: 0.125% × $20,000 = $25.00
- Customs broker: $175
- Drayage and inland delivery: $650
Total landed cost: $25,839.28, or about $25.84 per unit. The supplier price was $20 a unit, so the real cost is 29% higher than the invoice suggests.
To price for a 40% gross margin, divide by (1 − 0.40): $25.84 ÷ 0.60 ≈ $43.07. If you priced at $20 ÷ 0.60 = $33.33 instead, your actual margin would be only about 22.5%. The profit margin calculator and the margin calculator show this quickly.
Worked example: high-value air shipment
You import $250,000 of equipment by air at a 5% MFN rate.
- Duty: 5% × $250,000 = $12,500
- MPF: 0.3464% × $250,000 = $866, which is above the cap, so you pay $670.86
- HMF: $0, because HMF applies to cargo through ports, not air
On big entries the MPF cap matters. On many small formal entries, the $34.58 minimum adds up instead. Grouping shipments can lower fees per unit.
Worked example: what one tariff change does
In the first example, if the 10% extra layer ends, duty falls from $3,000 to $1,000. Landed cost drops by $2,000, or $2.00 per unit (from $25.84 to $23.84). If it rises to 25%, duty becomes 30% × $20,000 = $6,000, and landed cost goes up $3.00 per unit. Run both cases before you sign a long-term price with a customer.
Use the US import duty calculator to enter each tariff layer separately. Then check freight cost drivers with the dimensional weight calculator for parcels or the freight class calculator for LTL pallets.
IEEPA tariff refunds: where things stand
After the Supreme Court decision, CBP began issuing refunds of IEEPA duties through a process it calls CAPE. The official status is on CBP’s IEEPA duty refunds page. As of late October 2026:
- Phase 1 opened April 20, 2026 for unliquidated entries and entries within 80 days after liquidation.
- Phase 2 opened June 29, 2026 for entries flagged for reconciliation.
- Phase 3 opened October 6, 2026 for finally liquidated entries. It is limited to Court of International Trade plaintiffs with court-ordered reliquidation.
- Only the importer of record (or its licensed broker) can file, through the ACE Portal. Refunds are paid by ACH. CBP estimates 60 to 90 days.
If you bought from a seller who was the importer of record, the refund goes to them, not to you. Whether they pass any of it on is a matter of your contract. CBP also warns about refund scams. No one can speed up a CAPE refund for a fee.
Other tariffs are still in effect or in court, and rates keep changing. Treat any rate in a news story as a starting point. Confirm it in the HTS and with your broker on the day you import.
Checklist before you place a purchase order
- Confirm the HTS code and country of origin with your supplier and broker.
- List every tariff layer that applies, and whether each one stacks.
- Check whether your goods qualify under USMCA or another trade agreement.
- Get real freight quotes. Billable weight may be higher than actual weight (see what is dimensional weight).
- Add MPF, HMF, broker, and inland costs.
- Divide by units, then set your price from landed cost, not invoice cost.
- Recheck after any tariff announcement. CBP posts changes in its CSMS messages.
Low-value parcels from overseas sellers have also had rule changes. Check CBP’s e-commerce guidance before assuming a shipment enters duty-free.
FAQs
What is the formula for landed cost?
Landed cost = goods + international freight + insurance + duties and tariffs + customs fees (MPF, HMF) + broker fees + inland delivery. Divide by the number of units for a per-unit cost.
Is duty charged on shipping costs?
Usually not for U.S. imports. Duty is generally charged on the transaction value of the goods, which excludes international freight and insurance. Those costs still belong in landed cost.
What is the Merchandise Processing Fee in fiscal year 2027?
For formal entries from October 1, 2026, it is 0.3464% of the value, with a minimum of $34.58 and a maximum of $670.86.
Can I get a refund of IEEPA tariffs I paid?
Only the importer of record or its broker can file, through CBP’s CAPE process in the ACE Portal. Eligibility depends on each entry’s liquidation status. If someone else imported the goods, ask your seller.
How often should I recalculate landed cost?
Every time a rate, freight quote, or supplier price changes, and at least before each new purchase order. In 2026, tariffs have changed several times in a single quarter.