The real cost of importing a container

What "landed cost" means

Landed cost is the total cost of getting your goods into your warehouse: the goods themselves plus every charge on the way. Divide it by the number of units and you have the figure you need for pricing and margins.

The parts of a landed cost

1. 01

   The goods

   Your supplier's invoice, often in US dollars, usually paid as a deposit and a balance. The exchange rate on the day you pay changes what it costs you in pounds.

   When Deposit at order, balance usually before loading or release

2. 02

   Sea freight

   Moving the container from the port in China to the UK port. Who pays depends on your Incoterm, and rates move with the market.

   When Before or around sailing

3. 03

   Origin charges

   Trucking to the port, export clearance and origin terminal charges. On FOB these sit with the supplier; on EXW they are yours.

   When Around loading

4. 04

   Insurance

   Cargo insurance for loss or damage in transit. CIF includes only minimum cover, so many importers arrange their own.

   When Before sailing

5. 05

   UK port and forwarder charges

   Terminal handling at the UK port, plus the forwarder's documentation and release fees.

   When On arrival

6. 06

   Customs clearance fee

   Your customs broker's fee for making the declaration. Extra product lines or checks can add to it.

   When On arrival

7. 07

   Import duty

   A percentage of the customs value, set by the commodity code and the country of origin. Some goods have no duty.

   When Before release, unless deferred

8. 08

   Import VAT

   Normally charged at the same rate as UK sales. VAT-registered businesses can usually reclaim it, so it is mainly a cash-flow question.

   When Before release, unless postponed or deferred

9. 09

   Haulage

   Trucking the container from the port to your door. Price depends on distance, waiting time and whether it is unloaded while the driver waits or dropped and collected later.

   When At delivery

10. 10

    Demurrage and detention (a risk, not a given)

    Daily charges if the container stays at the port, or with you, beyond the free time.

    When Only if free time is exceeded

How duty and import VAT are worked out

Duty and VAT are not worked out on the invoice price alone. In order:

1Customs value

what you paid for the goods, plus freight and insurance up to the UK port of arrival

2Import duty

customs value × the duty rate for your commodity code

3Value for VAT

customs value + duty + transport and insurance costs up to the first destination in the UK

4Import VAT

value for VAT × the VAT rate (the standard rate is currently 20%)

UK terminal charges that are billed separately can be left out of the customs value. Sources: Delivery costs to include in the customs value (opens in a new tab), VAT on goods from abroad (imports) (opens in a new tab) and VAT rates (opens in a new tab).

How Portside shows it

Portside works out a landed cost per unit for every product line on a shipment. Supplier invoice lines are converted to pounds, then freight, duty and third-party charges such as port, haulage and customs broker fees are shared across the lines by value (the default), by quantity or equally. Supplier goods payments are never counted twice as charges.

• See the cost per unit as soon as the charges are in, not weeks later in a spreadsheet.
• Get a note when the pound moves enough to change what an open dollar invoice costs you.
• Compare freight with your earlier shipments on the same route.

Want to see what a slow collection could add? Try the free demurrage & detention calculator.