Ask five importers how much their last container actually cost, and you will get five numbers — none of which match the factory quote. The gap between FOB price and final landed cost is where import margins are made or lost. Building a landed-cost model before you sign a purchase order is the single most profitable hour you will spend in the sourcing process. Here is how to calculate it, line by line.
The landed-cost formula
Landed Cost = FOB Unit Price + Ocean Freight (per unit) + Insurance + Import Duty + Customs Broker Fees + Port & Terminal Charges + Inland Trucking + Inspection Cost (per unit)
If you order on DDP terms, the supplier calculates all of these for you and quotes one number. If you order FOB or CIF, you calculate them yourself — and if you miss a line, you pay the difference. Below is the arithmetic, with a worked example for a 300-piece custom disk brush order shipped from Shanghai to Rotterdam.
Step-by-step with numbers
| Line | Calculation | Cost |
|---|---|---|
| FOB unit price | Factory quote, 300 pcs | $1,500 (=$5.00/pc) |
| Ocean freight (LCL) | Shared-container rate, Shanghai→Rotterdam | $380 |
| Marine insurance | 0.3% of CIF value | $6 |
| Import duty (EU, HS 9603.50) | 2.7% on CIF value | $51 |
| Customs broker fee | Single entry, standard | $150 |
| Port & terminal charges | THC + documentation | $85 |
| Inland trucking | Rotterdam port → warehouse (150 km) | $220 |
| Pre-shipment inspection | One inspector, one day | $350 |
| Total landed cost | $2,742 | |
| Landed unit cost | $9.14/pc |
The FOB unit price was $5.00. The landed unit cost is $9.14 — an 83% increase. Most of that is freight, duties, and inspection, all of which are real and unavoidable. The difference between “cheap” and “expensive” sourcing is whether you modelled that 83% before or after you paid the invoice.
The lines most first-time importers forget
Port and terminal handling charges appear at both ends — the origin port and the destination — and are separate from the ocean freight line. Customs exam fees are not included in standard brokerage: if customs selects your container for a physical exam, you pay the unloading, exam, and reloading costs. Demurrage and detention start counting the moment your container exceeds its free time at the port, and one delayed document can cost hundreds of dollars before you know it. Currency conversion spread: your bank takes 1-3% between the rate you see on Google and the rate you actually get. For more on hidden fees that catch first-timers, see our guide on the true cost of sourcing from China.
FOB vs DDP on this order: which is actually cheaper?
On DDP, a capable supplier would quote roughly $2,600-$2,850 for this same order, delivered to your door. Compare that against $2,742 for the DIY FOB route above — factoring in the time you spent coordinating the forwarder, the broker, and the trucking company — and DDP is often slightly more expensive on the unit number but cheaper in total cost when you price your time. For a first order from a new supplier, the predictability of DDP usually outweighs the potential freight savings of FOB. For a detailed comparison of the terms themselves, see our Incoterms explained guide.
Related products
- Disk brushes — build your landed-cost model
- Strip brushes — calculate freight per unit
- China sourcing services — DDP landed-cost quotes
Get a landed-cost quote in one number
Pamin quotes DDP as standard — the figure on your quote includes product, freight, duties, and delivery to your door. Send your specification and destination country; we return the full breakdown above in a single number, usually within one business day. Request a quote today.