What is landed cost?
Landed cost is the total cost of getting your goods from the Chinese supplier to your own warehouse in Germany — ready to sell. It is the number you should base your pricing and margin decisions on, not the freight quote alone.
Most importers compare sea freight rates line by line. But the ocean freight is often only a fraction of what you actually pay. Ignore the other layers and your "cheap" shipment can end up the most expensive one.
The eight things that make up your landed cost
- Goods value — the EXW price you pay the factory for the products themselves.
- International freight — sea, air or rail. The line everyone quotes, but not the whole picture.
- Insurance — protects the cargo while it is in transit and is usually a small percentage of the goods value.
- Customs duty — a percentage of the goods + freight + insurance, set by the product's HS code and country of origin.
- Import VAT (Einfuhrumsatzsteuer) — in Germany 19% standard (7% reduced), charged on the total of goods + freight + insurance + duty.
- Customs brokerage & handling — filing, inspections and terminal fees at the port.
- Inland transport — trucking from the port (e.g. Hamburg) to your warehouse.
- Warehousing & distribution — optional, if you need goods stored or forwarded to end customers.
The formula
Put the pieces together and it looks like this:
The key insight: import VAT is charged on top of the duty, not just on the goods value. That means the tax you pay is larger than most importers expect — which is exactly why a landed-cost calculation matters.
A worked example
The numbers below are illustrative, for teaching only. Your real freight, duty rate and handling fees depend on your product, volume and route — contact me for a real calculation.
| Cost item | Amount |
|---|---|
| Goods (EXW) | €10,000 |
| Sea freight + insurance (illustrative) | €1,200 |
| CIF value | €11,200 |
| Customs duty (illustrative 6% — confirm your HS code) | €672 |
| Import VAT (19% of €11,872) | €2,256 |
| Brokerage + inland trucking (illustrative) | €450 |
| Total landed cost | €14,578 |
Notice what happened: duty, VAT and handling added €3,378 on top of the goods value — and VAT alone was the single biggest cost after the goods themselves. That is the gap between "freight rate" and "what it really costs".
Why the cheapest freight is rarely the cheapest landed cost
A low ocean rate can hide costs that show up later:
- Unreliable transit leads to demurrage at the port, storage fees and stockouts in your warehouse.
- Surprise surcharges (fuel, peak season, currency) that appear after you have booked.
- More handling on a poorly consolidated LCL shipment means a higher damage risk.
A slightly more expensive but reliable service often lowers your total landed cost, because you avoid the downstream charges and late arrivals that quietly eat your margin.
How to get your real numbers
- Classify your product — the HS code determines your duty rate. I can help you find the right one.
- Get a freight quote — sea, air or rail for your exact volume and route.
- Check the duty rate in the EU's TARIC database for your HS code and origin.
- Confirm your VAT setup — you need an EORI number and, usually, a German VAT registration.
- Run the full calculation — or let me do it for you, free.
Frequently asked questions
What is landed cost?
Landed cost is the total cost to move your goods from the supplier to your own warehouse, ready to sell. It includes the goods value, international freight, insurance, customs duty, import VAT, customs brokerage and inland transport.
How much import VAT do I pay when importing into Germany?
German import VAT (Einfuhrumsatzsteuer) is 19% standard or 7% reduced, charged on the total of goods value, freight, insurance and duty. If your business is VAT-registered, you can usually reclaim it as input VAT.
Can you calculate my landed cost for me?
Yes. Send me your product details, HS code (if you have it), volume and destination, and I'll prepare a transparent landed-cost breakdown for free — no obligation.
Related guides
Booked ≠ sailing: why your container can still miss the boat
Your booking is confirmed — but a mid-voyage port omission can still stop your container sailing. Learn the difference between a blank sailing and a port omissi
Read the guide →The EU ETS carbon line is now permanent on your freight quote
The EU Emissions Trading System now reaches ocean shipping, and carriers recover it as a carbon surcharge on your invoice. Here is how importers should model th
Read the guide →French port strike 30 October: reroute before the window closes
France's CGT dockers plan a nationwide strike on 30 October. Even if you don't ship to France, the spillover hits Rotterdam, Antwerp and UK gateways. Here is th
Read the guide →Let's talk
Tell me what you import, where it needs to go, and the volumes you expect — and I'll give you a transparent landed-cost breakdown, free of charge.