If a supplier overseas has quoted a lower price than your current mill, you need the landed cost of imported paper products before you can compare the two numbers honestly. A factory price or an FOB quote is not a landed cost. It is one line in a longer list that includes ocean freight, insurance, duties, several federal fees, broker charges, drayage, warehousing, and the financing cost of a longer cash cycle. This article is for purchasing managers and owners at jan-san distributors, foodservice distributors, converters, and retailers who need to build that full number themselves, line by line, and set it against a domestic quote on equal terms.
Key takeaways
- Landed cost is the factory price plus every dollar to get a container from the mill to your dock, cleared and ready to sell.
- The Incoterm (FOB, CIF, DDP, or another) decides who pays which line and when, not whether that line exists.
- MPF and HMF apply on top of duty, set by federal rule, not by your supplier.
- Convert everything to cost per case and cost per unit before comparing to a domestic quote, priced the same way.
- For tissue and towel, cube usually decides how much fits before weight does, so case dimensions and pallet pattern matter.
- An import carries risks a next-day domestic order does not: longer lead time, more inventory, slower quality catch.
What "landed cost" actually means
A domestic mill quote is close to a finished number. Freight is usually included or shown as one line, the mill has already paid duty on any imported fiber, and the truck shows up in days.
An import quote does not work that way. The number a factory sends you, whether FOB, CIF, or something else, is a starting point. Landed cost is what you get after adding every cost required to turn that quote into product sitting in your warehouse, cleared through U.S. Customs and Border Protection (CBP), ready to invoice against.
Skipping this step is how importers end up thinking they saved money when they actually broke even. The comparison only works when both numbers represent the same thing.
Every line in the landed cost of a container of towel or tissue
Below is the import cost breakdown for a container of away-from-home towel, tissue, or napkins. Not every line is charged to you directly; some are baked into the supplier's price depending on the Incoterm, covered next.
| Cost line | What it covers | What drives the amount |
|---|---|---|
| Factory (FOB) price | The product itself, packed and loaded at origin | Fiber cost, ply, basis weight, embossing, packaging, order volume |
| Inland origin costs | Trucking from the mill to the origin port, export documentation | Distance to port, origin trucking market |
| Ocean freight | Moving the container from the origin port to a U.S. port | Trade lane, carrier capacity, season, fuel surcharges |
| Marine cargo insurance | Coverage against loss or damage in transit | Declared cargo value, coverage level chosen |
| Duties and tariffs | Import duty owed to CBP based on the product's HTS classification | Base MFN rate plus any Section 301 or other add-on tariffs tied to country of origin |
| Merchandise Processing Fee (MPF) | A CBP user fee on formal entries | 0.3464% of value, subject to a floor and ceiling |
| Harbor Maintenance Fee (HMF) | A CBP fee funding harbor upkeep | 0.125% of declared cargo value, no cap |
| Customs broker fee | The licensed broker's charge to file your entry | Entry complexity, number of line items, broker's rate schedule |
| Importer Security Filing (ISF) | Advance security data filed before the vessel loads | Filing fee plus penalty exposure for late or wrong data |
| Port and terminal handling fees | Charges to move the container off the vessel and through the terminal | Port of entry, terminal operator |
| Drayage | Trucking the container from the port to your warehouse or a transload point | Distance, local trucking market, port congestion |
| Chassis and demurrage/detention risk | Chassis rental and per-day charges if the container or chassis is held past free time | Free time allowed, how fast the container is picked up and returned |
| Warehousing | Storage once product arrives, if it doesn't ship straight to the floor | Days held, warehouse rate |
| Financing cost | The cost of capital tied up for a longer cash cycle | Your cost of capital, days between paying the factory and selling the product |
| Currency | Movement in exchange rate between quote and payment, if not quoted in U.S. dollars | Currency pair, time between quote and settlement |
Two lines are federal fees on every ocean import. As of October 2025 (FY2026), MPF is 0.3464% of entered value, floored at $33.58 and capped at $651.50 (Expeditors, citing CBP, July 2025). HMF is a flat 0.125% of declared cargo value, with no cap (Shapiro, Harbor Maintenance Fee guide).
Duties move the most and are hardest to generalize. Chapter 48 of the Harmonized Tariff Schedule covers most paper and tissue products, often at a low or zero base Most Favored Nation rate. For China-sourced goods, that base rate is rarely the whole story: Section 301 actions layer duties on top for many lists, changed repeatedly since 2018 (USTR, Section 301 tariff actions page). Treat any duty figure as provisional and confirm the fully stacked rate with a licensed customs broker.
How Incoterms shift which lines you pay: FOB vs CIF vs DDP
The Incoterm on your order does not change the cost list above. It changes which land on the supplier's invoice and which you pay separately to a forwarder, broker, or trucker. The ICC maintains the current rules as Incoterms 2020, 11 terms each with a defined cost and risk split (ICC, Incoterms 2020).
| Incoterm | Who pays ocean freight and insurance | Who pays duties, MPF, HMF | Where risk transfers to you | What it means for your comparison |
|---|---|---|---|---|
| FOB (Free on Board) | You do, after the goods are loaded at origin | You do | When the goods are loaded on the vessel at origin | You see the most line items yourself, so you build the landed cost mostly from your own invoices |
| CIF (Cost, Insurance, Freight) | Supplier arranges and pays to the destination port | You do, from the port onward | When the goods are loaded on the vessel at origin, same as FOB | Freight and insurance are bundled into the supplier price; everything from the destination port forward is still yours to add |
| DDP (Delivered Duty Paid) | Supplier pays, including duties and destination delivery | Supplier pays and bakes it into the price | On delivery at your named destination | The quote is closest to a landed number already, but you still need to confirm what it actually includes |
FOB and CIF transfer risk at the same point, the ship's rail at origin (Kuehne+Nagel, Incoterms 2020 guide); the difference is only who books and pays freight and insurance. DDP is the outlier: the seller carries cost and risk to your door, including duties, which is why a DDP quote can look deceptively close to a finished landed cost.
No term makes the underlying costs disappear. FOB just means freight, insurance, duties, MPF, HMF, broker fees, and drayage arrive as your own line items instead of folded into the factory price. Reconciling whichever Incoterm is on the order into one landed number is part of what an import management service does. Offshore Products handles that reconciliation for its customers.
From container cost to cost per case and cost per unit
A landed cost for a full container is not comparable to a domestic quote. Domestic pricing is almost always shown per case or per unit, so an import number has to be converted the same way first.
Add every line from the table above for one container to get a total. Divide by the cases the container actually holds for cost per case, then by the count per case for cost per unit, whether that is a roll, a pack, or a sheet count.
This matters more than it sounds like it should, since case count per container is not fixed. It depends on carton dimensions and stacking, floor-loaded or palletized, covered next. Two suppliers quoting the same FOB price per case can land at different costs per case once you see how many cases their packaging fits.
Why cube matters more than weight for tissue and towel
Ocean containers have a weight limit and a volume limit. Dense cargo hits its weight limit before filling the cubic space, which freight people call "weighing out." Light, bulky cargo fills the volume first, which is "cubing out" (Buske Logistics, Cube Out definition).
Towel, tissue, and napkins are classic cube-out freight: light for their size, so case count is set by carton dimensions and stacking, not by weight capacity.
- Case dimensions decide utilization. Cartons that divide evenly into the container's width and length waste less space than ones leaving gaps at the wall.
- Floor-loaded versus palletized is a trade-off. Floor loading typically fits more cases, with no pallet deck or air gap lost. Palletizing costs some cube but speeds unloading with a forklift.
- Weight rarely limits a tissue or towel load. Unless dense parent rolls share the container, you will hit the cube limit well before rated payload weight.
Ask for the actual case count loaded per container, not a rule of thumb, and confirm whether it assumes floor loading or palletizing before calculating cost per case.
A worked example (illustrative numbers only)
The landed cost calculation below uses illustrative figures made up to show the method. They are not a quote, and actual costs vary by product, lane, carrier, and date. Confirm real numbers with your supplier, forwarder, and customs broker before relying on them.
Assume a 40-foot container of multifold towels, bought FOB at origin, landing at a U.S. port and moving by drayage to a warehouse roughly 30 miles away.
| Cost line | Illustrative amount |
|---|---|
| Factory (FOB) price | $18,000 |
| Ocean freight | $4,000 |
| Marine cargo insurance | $150 |
| Duties (illustrative rate applied to value) | $1,200 |
| Merchandise Processing Fee | $63 |
| Harbor Maintenance Fee | $23 |
| Customs broker fee | $175 |
| ISF filing fee | $35 |
| Port and terminal handling | $350 |
| Drayage, all-in | $650 |
| Chassis and demurrage risk (assume no delay) | $0 |
| Illustrative total landed cost | $24,646 |
If that container holds 2,200 cases at 6 rolls each, the illustrative landed cost is about $11.20 per case and $1.87 per roll. That per-case figure is what to hold against a domestic quote, not the $18,000 factory price or the $24,646 total.
Notice how small the fee lines are next to freight and duty, and how much the total moves if freight doubles or the container picks up demurrage. Rebuild this with real quotes before deciding.
The hidden costs on both sides of the comparison
A domestic quote and an import quote do not carry the same hidden costs, and both deserve a second look before you decide on the landed number alone.
What a domestic quote skips. A mill order arrives in days, so you run leaner inventory, with little exposure to freight swings, port congestion, or a demurrage bill. A damaged or off-spec pallet is caught and resolved fast, before it hits a customer order.
What an import adds. Lead time is the big one: production plus transit plus clearance typically runs weeks, so you order against a forecast further out and hold more safety stock, which carries its own cost. Quality risk also surfaces later, since a defect found after customs clearance is costlier to fix than one caught at a domestic mill, which is why pre-shipment inspection at origin is standard practice.
Neither list cancels the other out. A landed cost meaningfully below domestic can still win if you can carry the extra inventory and the lead time.
A checklist for an apples-to-apples comparison
Work through this before you put an import quote next to a domestic one:
- Confirm the Incoterm and which cost lines are already included versus paid separately.
- Get current figures for ocean freight, drayage, and duty rate, and date-stamp each one.
- Confirm the HTS classification and fully stacked duty rate with a licensed customs broker.
- Confirm the actual case count per container, and whether it is floor-loaded or palletized.
- Convert both quotes to the same unit: cost per case or per unit, not per container or pallet.
- Add inventory carrying cost for the extra lead time, at your own cost of capital.
- Add an allowance for demurrage or detention risk if the destination port has any history of delay.
- Confirm who owns pre-shipment inspection and what happens if goods fail it.
- Note the date every rate was confirmed; freight, duty, and fee figures change quickly.
Frequently asked questions
What is landed cost in simple terms?
Landed cost is the total cost to get a product from the factory to your warehouse, cleared and ready to sell, including the product price, freight, insurance, duties, government fees, broker charges, drayage, and financing cost. It is not the factory price or the FOB quote alone.
Is FOB or DDP cheaper for importing paper products?
Neither term makes the underlying costs cheaper. FOB and DDP only change who pays which line and when. A DDP quote bundles freight, insurance, duties, and delivery into one number from the seller, while an FOB quote leaves you to arrange and pay for those pieces yourself. Compare the final landed cost per case under each term, not the headline price.
What does ocean freight per container cost right now?
Ocean freight rates move with the trade lane, season, and carrier capacity, and can shift substantially within weeks. As of early September 2026, the Drewry World Container Index composite rate stood at about $4,465 per 40-foot container, with the Shanghai to Los Angeles route around $7,185 (Drewry, World Container Index). Treat any freight figure as a snapshot and get a current quote from your forwarder before you calculate a real landed cost.
What is drayage and why does it matter for landed cost?
Drayage is the short truck move that carries a container from the port to your warehouse or a transload point. Local drayage cost for a 40-foot container commonly runs from a few hundred dollars to close to $900 all-in with fuel, chassis, and port fees, and congested ports run well above that (WarehousingCosts.com, Port Drayage Costs guide, 2026). It is easy to underestimate, since the quoted base rate often excludes several of these add-ons.
Why does cube matter more than weight for tissue and paper towels?
Tissue and towel are light for their size, so a container usually reaches its volume limit before it reaches its weight limit, a state known as cubing out. That means the number of cases that fit is driven by carton dimensions and stacking pattern, whether the load is floor-loaded or palletized, rather than by how much weight the container can carry.
What are MPF and HMF and do they apply to every import?
The Merchandise Processing Fee (MPF) and Harbor Maintenance Fee (HMF) are federal fees charged by CBP on ocean imports, separate from any duty or tariff. As of fiscal year 2026, MPF is 0.3464% of the entered value with a floor of $33.58 and a ceiling of $651.50, and HMF is a flat 0.125% of cargo value with no cap. Both apply on top of duty on a typical formal entry.
Next step
Building a landed cost line by line is the only reliable way to compare an import quote with a domestic one. If you would rather have that number verified for a specific product and lane, request a quote or read about how import management covers this reconciliation for commercial and retail towel and tissue programs.
Sources
- International Chamber of Commerce, "Incoterms® 2020", accessed September 2026
- Kuehne+Nagel, "Incoterms 2020: international trade regulations", accessed September 2026
- U.S. Customs and Border Protection, "Importer Security Filing '10+2'", accessed September 2026
- GHY International, "U.S. Importer Security Filing (ISF): Requirements, Deadlines, and Penalties", accessed September 2026
- Expeditors, "CBP Announces Fee Changes for Fiscal Year 2026", July 2025
- Shapiro, "Harbor Maintenance Fee (HMF)", accessed September 2026
- Office of the United States Trade Representative, "China Section 301-Tariff Actions", accessed September 2026
- Federal Maritime Commission, "Detention and Demurrage", accessed September 2026
- Drewry, "World Container Index", September 3, 2026
- WarehousingCosts.com, "Port Drayage Costs (2026): Rates, Surcharges & Hidden Fees", updated July 15, 2026