How to Calculate Landed Cost: A Worked Example With Every Layer

A $20,000 order becomes a $27,641 landed cost. Here is every line in between, and the ones most cost sheets leave out.

Landed cost is everything you pay to get goods from a supplier to your warehouse: the goods, the transport, the insurance, the duties and the fees. Take a concrete example: 5,000 cotton T-shirts at $4 each, bought FOB Ho Chi Minh City and shipped by sea to Los Angeles, 1,200 kg in total.

1. Goods and transport

• Goods, FOB value: $20,000.00
• Ocean freight: $1,400.00, from the forwarder's quote
• Cargo insurance: $107.00, at 0.5% of goods plus freight

2. Duties

US duty is charged on the transaction value of the goods, which here is the FOB price. Freight and insurance are not included.

• Regular (MFN) duty for HTS 6109.10 at 16.5%: $3,300.00
• Forced-labor tariff under Section 301 for Vietnam at 12.5%: $2,500.00

Vietnam is not on China's Section 301 lists, so there is no further layer. The same shirts from China would add another 7.5%.

3. Fees

• Merchandise Processing Fee, 0.3464% of value: $69.28
• Harbor Maintenance Fee, 0.125% for ocean shipments: $25.00
• Importer Security Filing: $35.00
• Customs broker: $205.00

4. The total

Landed cost: $27,641.28, or 138% of the FOB price. Each shirt costs $5.53 to land, not $4.00. The duties alone, $5,800, are more than four times the freight.

The lines most cost sheets leave out

• The forced-labor tariff. Many cost sheets still carry only the regular duty.
• The minimum and maximum on MPF, $34.58 and $670.86 per entry from 1 October 2026, which make the fee weigh more on small entries.
• Fixed per-shipment costs such as the ISF, the broker and the customs bond. Spread over more units, they matter less.
• Exchange rates, when the supplier invoices in another currency.

Doing it for every product

The arithmetic is simple. Keeping the rates current is not: in 2026 the main US tariff on imports changed its legal basis twice, Section 232 reached new products, and goods from Canada picked up a 50% duty on hundreds of lines.

Zentria Flow's landed cost calculator does this for any HTS code, origin and destination: zentriaflow.com/landed-cost-calculator.