Landed cost explained: duty, MPF, HMF, freight and how to price imports

Most sellers know their factory price to the cent. Fewer know what the product costs once it is sitting in their warehouse. The gap is often 30% to 50% of the factory price, and in 2026 it moves every few months. If you price from the invoice instead of the landed cost, your margin is a guess.

This guide walks through each cost line for a U.S. import, then runs a full example with real rates.

The parts of landed cost

Step 1: Get the customs value right

Duty, MPF and HMF are all percentages of the customs value, so this number drives everything else. The U.S. uses transaction value under 19 U.S.C. 1401a: the price actually paid or payable for the goods when sold for export to the United States.

Unlike the EU, which values goods on a CIF basis, the U.S. excludes international freight and insurance from the customs value. If your supplier quotes CIF Los Angeles, you deduct the freight and insurance to get the dutiable value. In practice, U.S. customs value works like an FOB value.

Five things must be added to the price if you pay them and they are not already in it:

• Packing costs paid by the buyer.
• Selling commissions paid by the buyer.
• Assists: molds, tools, dies, materials or design work you supply to the factory free or at a discount. A $3,000 mold you paid for gets spread across the units it makes.
• Royalties and license fees you must pay as a condition of the sale.
• Resale proceeds that go back to the seller.

Step 2: Find the duty rate and the duty type

The base duty comes from the general column of your HTS line. There are three kinds of rates, and you need to know which one you have before you can calculate anything.

• Ad valorem: a percentage of value, such as 16.5%.
• Specific: an amount per unit, such as cents per kilogram or per pair.
• Compound: both at once, such as 90 cents per pair plus 20%.

Then add any additional duties that apply to your product and country of origin. As of October 2026 the main ones are:

• Section 301 on China: 7.5% to 100% depending on the list, on top of the base rate.
• Section 301 forced labor duties: from July 24, 2026, 10% or 12.5% on goods from 60 economies. Vietnam, China and most others pay 12.5%. Canada, Mexico, the UK, India and some others pay 10%. Goods subject to Section 232 and USMCA-qualifying goods are exempt.
• Section 232 on steel, aluminum, copper and their derivatives, autos, lumber and other sectors.

The IEEPA tariffs of 2025 no longer apply. The Supreme Court struck them down on February 20, 2026, and CBP stopped collecting them for entries from February 24, 2026. The Section 122 surcharge that replaced them expired on July 24, 2026.

Step 3: Add MPF and HMF

Merchandise Processing Fee

MPF is 0.3464% of the customs value on formal entries, which are entries over $2,500. For fiscal year 2027, which started October 1, 2026, CBP set the minimum at $34.58 and the maximum at $670.86 per entry. In fiscal year 2026 they were $33.58 and $651.50.

Informal entries, $2,500 and under, pay a flat MPF instead. For FY2027 it is $2.77 for an automated entry not prepared by CBP and $8.30 for a manual one. Originating goods under USMCA and most other U.S. free trade agreements are exempt from MPF. Jordan and Morocco are not on the exemption list, so their goods still pay it.

Harbor Maintenance Fee

HMF is 0.125% of the value of cargo unloaded from a commercial vessel at a U.S. port. There is no minimum or maximum. Air cargo does not pay it, because the fee only applies to vessel cargo. On $12,000 of goods, HMF is $15.

Step 4: Freight, broker and delivery

These are commercial costs, not government charges, so you need quotes. Typical lines on a small ocean shipment are the ocean freight or LCL share, origin charges, the broker's entry fee, an Importer Security Filing for ocean cargo, a customs bond, and drayage from the port. A single entry bond or a continuous bond is required for formal entries. A continuous bond is at least $50,000, or 10% of the duties, taxes and fees you paid in the last 12 months if that is higher.

A full worked example

You import 1,000 men's cotton knitted sweaters from Vietnam at $12.00 FOB each, by ocean, into Los Angeles in October 2026. The HTS code is 6110.20.20.10 with a 16.5% general rate. Vietnam is not a free trade agreement partner, and its goods pay the 12.5% Section 301 forced labor duty.

Duty and government fees alone are $3,536.57, which is 29.5% of the goods value. The sweater that costs $12.00 at the factory costs $17.60 in your warehouse, 47% more. Notice that freight and insurance are not in the base for duty, MPF or HMF. If you had charged duty on the $13,460 CIF value, you would have overstated duty and fees by about $430.

The same sweaters shipped by air would skip the $15 HMF but pay far more in freight. The same goods made in a USMCA country and qualifying for USMCA would pay no base duty, no MPF and no forced labor duty. Origin is often the biggest lever you have.

How to price from landed cost

Price from the landed cost per unit, not the factory price. Add your per-unit selling costs, then divide by one minus your target margin.

Price = (landed cost + selling costs per unit) / (1 - target margin)

Say marketplace fees, fulfillment and returns come to $12.00 per sweater (an assumption; check your own channel). At a 30% target margin: ($17.60 + $12.00) / 0.70 = $42.29. If you had priced from the $12.00 factory cost, the same formula would give $34.29, and every sale would earn about $5.60 less than you planned.

• Recalculate when tariffs change. In 2026 alone, IEEPA duties ended in February, the Section 122 surcharge ran from February to July, and the Section 301 forced labor duty started on July 24.
• Build a buffer for policy risk. Some Section 301 exclusions on Chinese goods expire on November 9, 2026, and several investigations are still open.
• Price by origin. If you source the same item from two countries, keep a landed cost per origin.
• Include duty in the price for DDP sales. If you sell delivered duty paid to U.S. customers from abroad, the duty is your cost, not theirs.

HTSBase calculates the base duty, stacked tariffs, MPF and HMF for any HTS code and origin, so you can run this table for each SKU without a spreadsheet.