What landed cost includes
| Cost element | Examples |
|---|---|
| Product cost | Supplier price, currency conversion, payment fees |
| Freight | Sea, air or road freight; local charges at origin and destination ports |
| Insurance | Cargo insurance, unless included in the Incoterm (CIF, CIP) |
| Customs and taxes | Customs duty, possible anti-dumping duties, customs broker fees |
| Final leg | Transport from port or terminal to the warehouse |
| Receiving | Unloading, checking, labelling, putaway at the warehouse |
The Incoterm in your purchase contract decides which of these the supplier has already included in its price. The duty rate depends on the commodity code and origin.
A simple example
| Per unit | Amount (EUR) |
|---|---|
| Purchase price | 10.00 |
| Share of sea freight and port charges | 0.80 |
| Customs duty (example rate 12% on customs value) | 1.30 |
| Customs broker fee, share per unit | 0.10 |
| Final leg and receiving, share per unit | 0.30 |
| Landed cost | 12.50 |
The figures are illustrative only. The customs value used to calculate duty normally includes the cost of transport and insurance to the EU border – your customs broker calculates it for the actual shipment.
Landed cost vs COGS vs logistics cost
- Landed cost – the cost of the product delivered to your stock location.
- COGS (cost of goods sold) – the direct cost of the products you sold in a period, in your accounts; landed cost feeds into it.
- Logistics cost – everything spent on moving and handling goods: freight in and out, warehousing, fulfillment and returns. Expressed per order or per unit, it shows the cost of serving a customer. See 3PL pricing.
Why it matters when choosing where to hold stock
Holding stock in Sweden changes the cost picture: inbound freight is consolidated in larger shipments, while outbound deliveries to Swedish customers get shorter. Compare the full chain – landed cost to the warehouse plus storage, fulfillment and delivery per order – rather than freight alone. See benefits of a warehouse in Sweden.
Frequently asked questions
Is import VAT part of landed cost?
For a VAT-registered business that can deduct import VAT, it is normally a cash-flow item rather than a cost. Whether and how you can deduct it depends on your VAT setup – check with your tax adviser.
Should warehousing be included?
It depends on the purpose. Many companies calculate landed cost to the warehouse, and then add storage and fulfillment separately to get the full cost per order.
How often should I recalculate?
Whenever freight rates, exchange rates, duty rates or order patterns change noticeably – at least for each new purchase order of important products.
Short definitions in the glossary: COGS – Cost of Goods Sold · Landed cost · Logistics cost · Cost per unit
This page gives general information about logistics terms. It is not legal, customs or tax advice, and it does not describe the terms of any specific agreement with Karlholm Logistics.