Landed Cost: Definition, Formula & Complete Calculation Guide
What is landed cost?
The landed cost is the true total cost of an imported product, calculated from the supplier all the way to your warehouse or point of sale. It goes well beyond the simple purchase price by integrating every charge added throughout the international supply chain.
Mastering landed cost is essential for three reasons:
- Correct pricing: setting a selling price that actually covers all your costs
- Supplier comparison: a supplier with a lower FOB price may be more expensive once all costs are factored in
- Import decision: determining whether importing is more profitable than buying locally
According to a World Bank study, logistics and regulatory costs represent on average 15-25% of the value of internationally traded goods.
The complete landed cost formula
Landed Cost = sum of all components below
- 1. Product purchase price (EXW, FOB or other Incoterm)
- 2. + International freight (sea, air, road)
- 3. + Transport insurance
- 4. + Customs duties
- 5. + Anti-dumping duties (if applicable)
- 6. + Import VAT
- 7. + Customs clearance fees (broker fees)
- 8. + Port/airport handling (THC)
- 9. + Inland transport (port to warehouse)
- 10. + Banking fees (LC, transfer, exchange)
- 11. + Inspections (PSI, standards, phytosanitary)
- 12. + Safety margin (contingency, 2-5%)
International freight benchmarks 2026
| Mode | Typical Route | Indicative Cost | Transit Time |
|---|---|---|---|
| Sea FCL 40' | Shanghai → Le Havre | USD 2,200-3,500 | 28-35 days |
| Sea LCL | Shanghai → Le Havre | USD 55-85/cbm | 30-40 days |
| Air | Shanghai → CDG | USD 3.50-6.00/kg | 3-5 days |
| Rail | Chengdu → Duisburg | USD 4,000-6,500 (40') | 14-18 days |
Customs duties
Calculated on CIF value according to the HS code. For France (EU), average rates are 4.2% for industrial products. See our complete guide to import duties in France.
Calculate your landed cost in 30 seconds
TRADE-COST integrates all these components: duties, VAT, freight, insurance, handling and margin.
Calculate my landed cost →Incoterm impact on landed cost
The Incoterm negotiated with your supplier determines which costs fall on you. The actual landed cost is similar regardless of Incoterm — the difference is in who controls each step. See our complete Incoterms 2020 guide.
Step-by-step example: 200 cartons of organic tea from Japan
| Component | Detail | Amount (EUR) |
|---|---|---|
| FOB price | 200 x EUR 15 | 3,000.00 |
| Sea freight LCL | 4 cbm x EUR 70/cbm | 280.00 |
| Insurance | 0.5% of CIF | 16.40 |
| CIF Value | 3,296.40 | |
| Customs duty (JEFTA) | 0% | 0.00 |
| Import VAT | 5.5% on CIF | 181.30 |
| Clearance + THC + inland | Broker + port + Paris | 495.00 |
| Banking fees | SWIFT | 25.00 |
| TOTAL LANDED COST | 3,998.70 |
The unit landed cost is EUR 19.99 per carton, versus FOB EUR 15. Costs represent 33% of the FOB price.
7 levers to optimize your landed cost
- Negotiate FOB Incoterm: control over forwarder selection and freight rates
- Use FTAs: certificate of origin = 0% or reduced rate
- Consolidate shipments: FCL is much cheaper per cbm than LCL
- Compare ports: Le Havre, Antwerp, Rotterdam — THC fees vary
- Plan around seasons: avoid Chinese New Year and Q3/Q4 peak
- Verify HS classification: a more precise code can yield a lower rate
- Automate the calculation: tools like TRADE-COST avoid manual errors
Your landed cost in one click
No more approximate Excel spreadsheets. TRADE-COST calculates your complete landed cost with up-to-date rates.
Calculate now →Conclusion
Landed cost is the only reliable indicator for evaluating import profitability. For a concrete guide on importing from China with all real costs, see our complete guide to importing from China to France.
Frequently asked questions
What is landed cost?+
Landed cost is the total cost of an imported product once it arrives at its destination. It includes the purchase price, international transport, insurance, customs duties, VAT, clearance fees, port handling, and inland transport.
What is the landed cost formula?+
Landed Cost = Purchase Price (EXW/FOB/CIF) + International Freight + Insurance + Customs Duties + Import VAT + Clearance Fees + Handling + Inland Transport + Banking Fees + Safety Margin.
What is the difference between landed cost and FOB price?+
FOB price only covers the cost of goods loaded on board the vessel. Landed cost includes ALL costs through final delivery. Landed cost is typically 30-70% higher than FOB price.
How can I reduce my landed cost?+
Optimize your Incoterm (FOB lets you control freight), use FTAs (certificate of origin), consolidate shipments, negotiate port fees with your forwarder, and verify tariff classification.
Thomas Delaunay
Thomas focuses on landed-cost modeling and forwarder benchmarking. Previously a procurement lead at a mid-cap industrial importer, he builds the cost intelligence that powers TRADE-COST calculations.
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