Landed cost

Related terms

Incoterms

Incoterms are the International Chamber of Commerce rules that define who pays for freight, insurance, and duties, and where risk passes from seller to buyer in international trade. The current set, Incoterms 2020, has 11 rules, including EXW, FCA, FOB, CIF, DAP, and DDP.

Tariff

A tariff is a tax on imported goods, collected in the US by Customs and Border Protection and set by the product's HTS code and country of origin. Beyond base duty rates, added tariffs such as Section 232 and Section 301 duties can change with little notice.

DDP

DDP is Delivered Duty Paid, the Incoterm under which the seller delivers goods to the buyer's named place, cleared for import, with freight, duties, and taxes paid. It puts the most responsibility on the seller and gives the buyer the closest thing to a true landed price.

Nearshoring

Nearshoring is moving production to a nearby country, for US buyers usually Mexico or Canada, to cut transit time, inventory, and tariff exposure while keeping labor costs below domestic levels. Parts that meet USMCA rules of origin can enter the US duty-free.