Landed Cost for Garment Imports: FOB, Freight, Duty & Tariffs
Landed cost is what your garments really cost at your warehouse. How to build FOB up through freight, duty and clearance, and where buyers under-count.
Landed cost is the total you actually pay to get a garment into your warehouse, ready to sell. It is FOB plus international freight plus customs duty and tariffs plus clearance and brokerage plus insurance plus any inland or last-mile delivery. Add your own sampling and QC spend, because that money is real too. FOB is only the first line of that sum. Compare suppliers on FOB alone and you are reading the first page of a bill, then assuming it is the whole invoice.
That gap is where buyers get hurt. A lower FOB from the wrong origin, on a bad freight lane, against a higher duty rate, can land dearer than a higher FOB that ships cheaper and clears at a lower tariff. The way you win on landed cost is not the lowest opening number. It is a transparent, factory-direct quote, the right country of origin, and a partner who puts the whole build-up in front of you instead of one headline figure.
What FOB does and doesn't carry
FOB (Free On Board) is the price of your goods loaded onto the vessel at the origin port. For Bangladesh that is usually Chittagong. At the ship's rail, ownership and risk pass to you, and so does every cost from there to your door: freight, insurance, duty, brokerage, inland haulage, all yours, none of it inside the FOB number. For the full breakdown of what sits inside that price, see what FOB does and doesn't include.
So FOB is the honest, transparent base to build on. It is just not the answer to "what will this cost me." For that, you walk it all the way to the warehouse.
The worked build-up
Here is the full stack on one woven cotton shirt, sourced FOB from Bangladesh and imported into the US by sea. Every figure below is illustrative, round numbers chosen to show the mechanics, not a quote. Your real freight depends on your lane and container utilisation; your real duty depends on exact fibre content and HS classification. Confirm both before you model anything.
| Cost layer | Illustrative per-unit | How it's derived |
|---|---|---|
| FOB (ex Chittagong) | $5.00 | Factory price, loaded on vessel |
| + Ocean freight | $0.35 | Container cost ÷ units, by sea |
| + Insurance | $0.05 | ~1% of goods value, marine cover |
| = CIF value (duty base) | $5.40 | What duty is charged on |
| + Customs duty / tariffs (~26.5%) | $1.43 | Applied to the CIF value |
| + Clearance / brokerage | $0.15 | Customs entry, port & handling ÷ units |
| + Inland / last-mile | $0.20 | Port to your warehouse ÷ units |
| = Landed unit cost | $7.18 | What it really costs you, in stock |
Read the two bold lines. The FOB was $5.00. The garment lands near $7.18, about 44% above FOB, and most of that lift is duty on the CIF value. That ratio is the whole argument for costing landed. A 30-cent FOB saving means little if the cheaper origin carries an extra eight points of tariff on the dutiable value.
Freight: sea versus air
Ocean is the default for apparel and the cheapest per piece by a wide margin. The trade-off is time. A full container (FCL) spreads freight across the most units, so cost per piece drops as the box fills. Part-container (LCL) costs more because you share the box. Air is the opposite balance: multiples dearer, but it moves in days, which makes it a tool for late launches and replenishment, not a main order. Quote both per piece on your actual lane; the "cheap" mode is the one that lands lowest after you divide by real, packed units.
The duty stack, and why origin moves the number
Duty is where country of origin earns or loses you money, and on US apparel imports in 2026 it stacks in layers on the CIF value:
- MFN base rate. The standard most-favoured-nation tariff. For woven cotton it runs roughly 9% to 20%; man-made fibre garments go higher, up to about 32%. Fibre content drives the rate, so the fabric you spec changes the duty you pay.
- Section 122 surcharge. A flat 10% currently applied across all countries. It is volatile and scheduled to expire around July 2026, so treat it as a moving part, not a fixed input.
- Section 301, China only. An extra 7.5% on apparel from China that Bangladesh does not carry.
Stack those and the structural gap is plain. A typical cotton woven shirt lands around 26 to 27% duty from Bangladesh, against roughly 34% from China, on the same garment at the same FOB. That is not a rounding difference. Seven or eight points on the dutiable value is real margin, every unit, every order. Origin is a lever on landed cost, and Bangladesh sits on the favourable side. We unpack the full layer-by-layer detail in the 2026 tariff detail.
Two cautions, because this is the volatile part of the calculation. First, the $800 de minimis exemption is gone. It ended globally in August 2025 and remains suspended, so there is no duty-free path for small parcels any more. Every commercial unit pays. Second, rates are moving fast in 2026. These figures are accurate as of June 2026. Before you commit a costing, confirm the live duty for your exact HS code and lane with a licensed customs broker. We give you our honest read; your broker signs off the number.
Clearance and insurance: small lines, real money
Two layers round out the build-up. Customs clearance and brokerage covers entry filing, port fees, and destination handling; per piece it is small on a full container and larger on a part load, because the fixed cost spreads over fewer units. Marine insurance is cheap, around 1% of goods value, and skipping it to shave a cent is false economy. One lost container costs more than years of premiums. Both belong in the model from the start, not as surprises on the broker's invoice.
The hidden costs that wreck a landed-cost model
The build-up above is the visible stack. The costs that blow budgets are the ones a cheap FOB hides. This is the cheap-FOB trap: a low headline number that quietly buys you a more expensive garment.
- Spec substitutions. A lighter fabric, a thinner GSM, a generic trim in place of the branded one you specced. The FOB drops, the quote wins, and the saving evaporates the moment the goods arrive wrong and you are reworking or re-ordering.
- Defects and returns. Weak QC ships you seconds. Every defective unit is a return, a refund, or a markdown, and none of that shows up in the FOB you compared.
- Demurrage. Containers that sit at port past free time accrue daily charges. A late document or a clearance hiccup turns into a bill that has nothing to do with the garment and everything to do with how the shipment was managed.
- Sample and QC spend. Sampling rounds, lab tests, and third-party inspection are part of your true cost of goods. Leave them out and your landed number is fiction.
None of these sit in an FOB quote; all of them hit your landed cost. A transparent partner surfaces them up front. A broker chasing a headline number lets you find them later.
How a transparent factory-direct partner lowers true landed cost
Put the layers together and the route to a lower landed cost is clear, and it is not chasing the cheapest FOB. Four moves do the work:
- Cut the middleman margin. Buy through a trading house or agent and a margin sits on top of the factory price, often invisibly. Factory-direct removes that layer, so the FOB you build on is the real floor price.
- Demand honest CIF and landed quotes. A partner who quotes CIF to your port, or builds an indicative landed number with freight and duty included, lets you compare like for like against what you pay today. One who gives you FOB and waves at the rest is hiding the part that matters.
- Pay for QC that prevents defects. Inspection is the cheapest line in the build-up and protects every other line. Catching a substitution on the floor, before the container ships, costs a fraction of the returns and markdowns after it lands.
- Source from the right origin. All else equal, Bangladesh's lower duty exposure lands the same garment cheaper into the US than China would. That is structural, every unit.
How we quote at EliteHeights
We are a family-owned, factory-direct woven floor in Dhaka, already producing for brands like Mango, Zara, Tommy Hilfiger, Calvin Klein, LIDL and Peacocks. So the FOB we quote is a real working price from the floor, with no trading-house margin on top. Send us a style and a target, and you will get an indicative FOB by category you can drop straight into your own landed-cost model.
If it helps, we will go further and quote CIF to your port, or build an indicative landed number with freight and duty layered in, so you compare against what you actually pay now rather than a figure that stops at the ship's rail. Origin works for you here: from Bangladesh, that landed number carries the lower duty exposure, not the China tariff stack. We give you our honest read on the layers and tell you plainly to confirm the live rate with your broker, because in 2026 it moves.
That is the offer, in one line: a transparent base price, the right origin, and a quote that runs all the way to your warehouse. When you want a real number on your own program, ask for a landed quote and we will build it with you, layer by layer.