Many importers price a product on the supplier's invoice and are surprised when the real cost is much higher. Landed cost is the total cost of getting goods to your premises. Work it out before you order, not after the container arrives.
The building blocks
| Cost | What to check |
|---|---|
| Goods | Invoice value, payment terms, any bank or transfer charges. |
| International freight | Sea or air rate, origin charges and surcharges. Depends on your Incoterm. |
| Insurance | Cargo cover for the journey. Do not skip it on valuable or fragile goods. |
| Duties and taxes | Import duty and other levies are assessed on the customs value and the tariff classification of the goods. Rates change, so confirm current figures with your agent. |
| Port and handling | Terminal handling, container freight station, scanning, and any storage or demurrage if cargo is delayed. |
| Clearing agent fee | The agent's professional fee, which should be shown separately from duties and charges. |
| Inland transport | Trucking from the port or depot to your warehouse or site, plus any offloading. |
| Storage and distribution | Warehousing and last-mile delivery, if you do not receive goods at your own premises. |
A simple way to estimate
- Ask your supplier for the quote on the Incoterm you will use.
- Ask your clearing agent for an itemised estimate of duties, taxes, port charges and their fee for your product.
- Get a transport quote from the port or depot to your destination.
- Add everything, then divide by the number of units to get your cost per unit.
Check the customs value. Duties are usually assessed on the customs value of the goods, which can include freight and insurance. How that value is built depends on your terms of sale, so ask your agent before you finalise a price.
Costs people forget
- Storage or demurrage caused by late documents
- Regulatory approvals, inspections or testing fees for certain goods
- Currency movements between ordering and paying
- Shortfalls and damage, which is why insurance matters
Frequently asked questions
Why is my total cost higher than the supplier's invoice?
The invoice covers only the goods. Freight, insurance, duties and taxes, port charges, clearing fees and inland transport are separate and often add a large share on top.
Can I get a landed cost estimate before I order?
Yes, and you should. Send your product details and route to your clearing agent and ask for an itemised estimate before you commit to a supplier.