Total Landed Cost

What Is Total Landed Cost?

Total landed cost is the complete cost of getting a product from its origin to its final destination, including the product cost, freight, insurance, customs duties, taxes, and any other fees incurred along the way.

How Is Total Landed Cost Calculated?

It sums the unit product cost with all associated shipping and import costs: ocean or air freight charges, insurance, customs duties and taxes, HMF and other port fees, customs broker fees, and inland transportation to the final destination. Missing any of these components leads to underestimating the true cost of imported goods.

Why Total Landed Cost Matters

Comparing suppliers or sourcing locations based on unit price alone can be misleading, a cheaper unit price from a farther or higher-tariff origin can result in a higher total landed cost than a slightly more expensive but closer or lower-tariff alternative. Accurately calculating total landed cost is essential for sourcing decisions, pricing strategy, and evaluating the true impact of tariff or freight rate changes.