Landed cost is the total cost of getting material from the Chinese factory gate to your site, including unit price, export charges, ocean freight, insurance, duty, import taxes, clearance, inland delivery and inspection. It is the only number that can be compared against a local supplier’s quotation — the FOB price cannot.
Buyers who compare a Chinese FOB price against a local delivered price and conclude they are saving 40% are comparing two different things. Sometimes the saving is real once everything is counted. Sometimes it is a third of what it looked like. You cannot know which without building the calculation.
Every cost line, in order
| # | Cost line | Who usually pays | Notes |
|---|---|---|---|
| 1 | Unit price (ex-works) | Buyer | The factory gate price |
| 2 | Tooling / mould | Buyer | One-off, custom products only |
| 3 | Sample cost | Buyer | Sometimes credited against the order |
| 4 | Certification & testing | Buyer | Per product, per standard, per destination |
| 5 | Export-grade packaging | Buyer | Often quoted separately from unit price |
| 6 | Inland freight to Chinese port | Included in FOB | Significant for heavy goods from inland provinces |
| 7 | Export customs declaration | Included in FOB | |
| 8 | Origin terminal handling | Included in FOB | |
| 9 | Consolidation / warehousing | Buyer | Only if combining multiple suppliers |
| 10 | Pre-shipment inspection | Buyer | Third-party or coordinated |
| 11 | Ocean freight | Included in CFR/CIF | Volatile — check validity of any quoted rate |
| 12 | Marine insurance | Included in CIF | |
| 13 | Destination terminal handling | Buyer | |
| 14 | Import customs clearance | Buyer | Broker fee |
| 15 | Import duty | Buyer | Depends on HS code and origin |
| 16 | VAT / GST / sales tax | Buyer | Often recoverable — check locally |
| 17 | Port storage / demurrage | Buyer | Only if clearance is slow |
| 18 | Inland delivery to site | Buyer | |
| 19 | Unloading and handling | Buyer | Site access matters for containers |
| 20 | Wastage, breakage, rejects | Buyer | Real, and rarely budgeted |
Lines 6, 7 and 8 are the ones that move between the buyer and the seller depending on the Incoterm — which is exactly why quotes on different Incoterms cannot be compared. The current rules are published by the International Chamber of Commerce.
The lines buyers most often forget
Demurrage and detention. Free time at the destination port is limited. If clearance stalls — a document discrepancy, a missing certificate, an inspection hold — daily charges start, and they escalate. This is a documentation problem expressing itself as a cost problem.
Container unloading at site. A 40ft container needs access, space to manoeuvre, and labour to devan. Tight urban sites often need a transhipment to smaller vehicles, which is an unbudgeted line that surprises first-time importers.
Wastage and breakage. Tiles, glass, stone and sanitary ware all arrive with some proportion damaged or unusable. Budget for it, and specify packaging that reduces it rather than discovering the ratio at delivery.
Certification you did not scope. If the destination requires product compliance documentation that was not requested at enquiry stage, obtaining it after production is expensive and slow, and may not be possible at all for a batch already made.
Currency movement. On a lead time measured in months, exchange rate drift between quotation and final payment is a genuine cost line, not a rounding error.
Inspection and rework. Correcting non-conformances before shipment costs money. It costs less than receiving them.
Related: Quality control checklist for importing tiles, sanitary ware and doors
A worked structure
Build it as a per-unit calculation so it compares cleanly against a local quote:
Ex-works unit price A
+ Tooling / sample / certification ÷ qty B
+ Export packaging ÷ qty C
= Factory-gate cost per unit D = A+B+C
+ Inland freight + export clearance ÷ qty E
= FOB cost per unit F = D+E
+ Ocean freight ÷ qty G
+ Insurance ÷ qty H
= CIF cost per unit I = F+G+H
+ Destination handling ÷ qty J
+ Duty (% of customs value) K
+ Clearance fee ÷ qty L
= Cleared cost per unit M = I+J+K+L
+ Inland delivery ÷ qty N
+ Unloading ÷ qty O
÷ (1 − wastage %) adjust
= LANDED COST PER UNIT PEverything divided by quantity is where order size does its work. Freight, clearance and handling are largely fixed per container, so a half-full container roughly doubles those lines per unit. This is the mechanism behind the advice to consolidate — it is not a preference, it is arithmetic.
Related: FCL vs LCL for construction material shipments · MOQ for building materials from China
Duty, HS codes and origin
Import duty depends on the tariff classification of the product and its country of origin, applied to a customs value that your destination defines. Three practical consequences:
Classification is your responsibility, not the supplier’s. A Chinese factory’s export declaration code is not necessarily the code your customs authority will accept. Confirm the classification with your broker before shipping, not after arrival.
Preferential treatment depends on documentation. Where a trade agreement between China and your country provides a reduced rate, it is typically conditional on a valid certificate of origin issued in the correct form. Obtain it at shipment; retrofitting it afterwards is often impossible.
Rules change. Tariff schedules, trade remedies and anti-dumping measures on specific building material categories are updated regularly and vary by destination. Verify current rates with your national customs authority or a licensed broker before you build them into a budget. For example, importers into the United States can check current classification through US Customs and Border Protection; other jurisdictions publish equivalent schedules.
This article is not customs, tax or legal advice. Tariff rates, anti-dumping measures and import requirements are jurisdiction-specific and change frequently — verify current figures with a licensed customs broker in your destination country before relying on them.
When importing stops being cheaper
Imported material is not automatically cheaper. It stops being cheaper when:
- The order is too small to fill a container, so fixed costs per unit multiply
- The product is low-value and high-volume, so freight dominates the unit cost
- Duty on the category is high in your destination
- The specification requires certification that costs more than the price advantage
- The programme cannot absorb the lead time, and the delay cost exceeds the saving
- The product needs frequent small replenishment rather than a single bulk purchase
Run the calculation before deciding. A category-by-category landed cost comparison across a project BOQ often shows that some categories are strongly worth importing and others are not — which is a better answer than importing everything or nothing.
Building the comparison across a full BOQ
The calculation above is straightforward for one product. Across a twelve-category BOQ with different factories, different loading ports, different duty rates and different wastage profiles, it becomes a real modelling exercise — and the point at which many buyers give up and decide on the FOB price alone.
That comparison is part of what sourcing construction materials from China through a coordinator is for. Quotations returned in a normalised format, with export packaging, inland freight, consolidation and inspection identified per line, give you a landed cost your commercial team can actually check. The BOQ sourcing process produces the comparison against your own line numbers across all 19 material categories.
Frequently asked questions
What is the difference between FOB price and landed cost?
FOB price covers the goods loaded on the vessel at the Chinese port. Landed cost adds ocean freight, insurance, destination handling, duty, taxes, clearance, inland delivery and wastage. FOB is typically a fraction of the total.
How much should I budget beyond the FOB price?
It varies enormously with product density, value, destination and duty rate — a high-value, low-volume product behaves nothing like a low-value, high-volume one. Build the calculation for your specific category rather than applying a rule of thumb.
Is duty charged on the freight as well as the goods?
It depends on the customs valuation method your destination uses. Some jurisdictions assess duty on a CIF value that includes freight and insurance; others on an FOB value. Confirm with your broker.
Can I recover the VAT or GST I pay on import?
In many jurisdictions a registered business can, but the rules are local. Check with your accountant — this changes the effective cost significantly.
Does a DDP price solve this?
It bundles the lines into one number, which is convenient. It does not remove them, and it hands control of customs valuation and classification to your supplier. Understand what that means in your jurisdiction before accepting DDP.
Get a landed-cost-ready quotation
Send your BOQ with the destination port and country. Quotations come back with export packaging, inland freight, consolidation and inspection identified separately, so the landed cost calculation is yours to complete rather than yours to guess at.