# The five costs your landed cost model forgets

Source: https://landedsight.com/blog/2026-11-13-five-landed-costs-models-forget.html

Cross-border operations guide · November 13, 2026


**Short answer:** A landed cost model that counts product, freight, and duty is missing the lines that decide the margin: the Merchandise Processing Fee at 0.3464 percent, the Harbor Maintenance Fee at 0.125 percent on ocean shipments, brokerage, demurrage and detention, and currency movement. Each one is small. Together they are the difference between a SKU that makes money and one that quietly loses it.

## The two fees that are always there

The Merchandise Processing Fee is charged on most formal entries at 0.3464 percent of the value, and it applies whether the importer remembers it or not. It is a percentage, so it scales with the shipment, and on a high-value container it is a real number, not a rounding error. A model that omits it understates the cost on every entry, every time.

The Harbor Maintenance Fee is 0.125 percent of the value on ocean shipments, charged for the use of US ports. It is smaller than the MPF and easier to forget, which is why it is forgotten more often. A model that counts the MPF and misses the HMF is a model that is wrong by an eighth of a percent on every ocean shipment, and an eighth of a percent on a million dollars of imports is 1,250 dollars.

Both fees are eligible for duty drawback in the same way duties are, which is another reason to count them: a fee that is not in the model is a fee that is not in the drawback claim, and the refund is smaller than it should be. The fees are small, but they are certain, and certainty is what a model is for.

## The two costs that arrive late

Brokerage is the fee for the entry itself, and it is usually a flat fee per entry, a few hundred dollars. It is small per container and invisible in the model, because it does not scale with the shipment. But it is charged on every entry, and a business filing a hundred entries a year pays it a hundred times. The per-unit cost is small. The annual cost is not.

Demurrage and detention are the costs that arrive late and in large amounts. A container that sits at the terminal beyond the free days accrues demurrage, and a container kept outside the terminal beyond the agreed period accrues detention, both typically 50 to 120 dollars per container per day. A container that sits for a week because the warehouse was not ready, or the truck was late, or the paperwork was wrong, costs 350 to 840 dollars in charges that no model predicted, because no model predicted the delay.

The fix is to budget for them as a rate, not as zero. A business that averages one delayed container in twenty can budget 5 percent of the demurrage exposure into the model, and the model will be right on average, which is better than being right on the shipments that went smoothly and wrong on the ones that did not.

## The cost that moves after the quote

Currency is the fifth forgotten cost, and it is the one that moves after the model is built. Duty is ad valorem, charged on the value, so a currency move changes the duty base. A shipment invoiced in euros or yuan and paid in dollars costs more when the dollar weakens, and the duty rises with it, because the value in dollars rises. The model that was built on last month's exchange rate is wrong by the time the goods arrive.

The currency adjustment factor on ocean freight is the visible version of the same problem: a 3 to 8 percent add-on on lanes priced in currencies other than the dollar, applied when the carrier's home currency strengthens. The invisible version is the product cost itself, which moves with the exchange rate between the purchase order and the payment.

The answer is not to predict the currency. It is to build the model on a rate that is current, to update it when the rate moves by more than a point or two, and to consider hedging the exposure when the volume justifies it. A model built on a stale rate is a model built on a guess, and the guess is usually optimistic.

Related reading on this site: [FOB looks cheaper than DDP until the duty lands](https://landedsight.com/blog/2026-11-12-fob-vs-ddp-landed-cost.md), [Landed cost per unit: the formula that catches the fees your supplier left out](https://landedsight.com/blog/2026-11-12-landed-cost-per-unit-formula.md), and [What does a freight forwarder actually do for your landed cost?](https://landedsight.com/blog/2026-11-11-what-freight-forwarder-does-landed-cost/).

## Frequently asked questions

### What is the Merchandise Processing Fee?

The Merchandise Processing Fee, or MPF, is charged on most formal customs entries at 0.3464 percent of the value. It applies whether or not the importer remembers it, and it scales with the shipment value.

### What is the Harbor Maintenance Fee?

The Harbor Maintenance Fee, or HMF, is 0.125 percent of the value on ocean shipments, charged for the use of US ports. It is smaller than the MPF and easier to forget, which is why it is missed more often.

### What are demurrage and detention?

Demurrage is charged for a container left at the terminal beyond the free days. Detention is charged for keeping the carrier's container outside the terminal beyond the agreed period. Both typically run 50 to 120 dollars per container per day.

### Why does currency matter for landed cost?

Because duty is ad valorem, charged on the value, so a currency move changes the duty base. A shipment invoiced in euros or yuan and paid in dollars costs more when the dollar weakens, and the duty rises with it. The model has to use a current rate.