The single most common costing mistake in importing is comparing suppliers on their FOB price alone. The FOB price is only the first line of the bill. By the time a container of jute reaches your warehouse, freight, insurance, duty, clearance and inland haulage have all stacked on top — and the cheapest FOB offer can easily end up the most expensive delivered. This guide shows you how to build a true landed cost, with a worked example you can copy.
Landed cost is the all-in cost of getting goods to your door: product + logistics + duties + fees. It is the only number you should use to compare suppliers and set your selling price.
The components of landed cost
A jute import landed cost is built from these layers:
- Product cost — the FOB value of the goods
- Origin charges — inland haulage to port, export clearance, terminal handling (often inside FOB)
- Ocean freight — the main sea freight to your port
- Insurance — marine cargo cover for the voyage
- Import duty & taxes — tariff plus VAT/GST as applicable in your country
- Destination charges — terminal handling, customs clearance/brokerage, port fees
- Inland delivery — haulage from the destination port to your warehouse
- Risk costs — demurrage/detention if clearance is slow, currency movement
Which of these the supplier has already covered depends on your Incoterm — that is why the Incoterm must be fixed before you can compare.
A worked example
Here is an illustrative full-container load of jute yarn bought FOB Chittagong, shipped to a European port. The figures are illustrative only — use live quotes for your own lane — but the structure is exactly how to lay it out.
| Cost component | Amount (USD) | Running total |
|---|---|---|
| Product — FOB value | 18,000 | 18,000 |
| Ocean freight (origin→dest port) | 1,900 | 19,900 |
| Marine insurance (~0.3%) | 60 | 19,960 |
| Destination terminal handling | 320 | 20,280 |
| Customs clearance / brokerage | 180 | 20,460 |
| Import duty (see note below) | 0–varies | 20,460+ |
| Inland haulage to warehouse | 420 | 20,880+ |
| Landed cost (excl. duty/VAT) | — | ≈ 20,880 |
On these illustrative numbers, logistics and fees add roughly 16% on top of the FOB price before any duty — which is why a supplier who is 5% cheaper FOB but ships from a higher-freight lane or with weaker documentation can cost you more delivered.
A note on duty: the Bangladesh advantage
Import duty can be the largest single add-on — or close to zero. Bangladesh's status as a Least Developed Country has historically given its jute duty-free access to the EU under the Everything But Arms scheme, and preferential access in several other markets. Bangladesh is transitioning out of LDC status with a transition period, so confirm the current tariff treatment for your product code and destination with your customs broker. Where preferences apply, they materially cut landed cost — see the European sourcing guide.
Cost per unit — the number that matters
Always convert landed cost to a per-unit figure (per MT, per bag, per 100 yards) so you can compare offers and price your own product. Divide the landed total by the quantity in the container. Small differences in pack-out — how much product fits per container — can swing the per-unit cost more than the headline FOB price.
How to reduce your landed cost
- Buy factory-direct — remove the middleman's margin (the core of our model)
- Consolidate orders into full containers to cut freight per unit
- Compare on landed cost and a common Incoterm, never FOB alone
- Use available tariff preferences — confirm origin documentation is correct
- Choose a supplier with disciplined documentation to avoid costly clearance delays and demurrage
Frequently asked questions
Does a CIF quote include duty?
No. CIF covers cost, insurance and freight to your port; import duty, VAT and destination clearance remain the buyer's responsibility. Only DDP includes duties.
How much is freight from Bangladesh?
It varies constantly with route, season and fuel. Get a live quote from a forwarder for your lane, or ask us for a CIF price and we will build freight in.
Can you quote landed cost to my country?
We can quote FOB, CFR or CIF precisely; final duty and local charges depend on your tariff classification and broker, which we will help you document.
Get a precise, comparable quote
Tell us your product, quantity, destination port and Incoterm, and we will give you a clear price to build your landed cost on. Request a quote or read the full import guide.
