A factory-gate or export price does not necessarily represent the cost of putting the machine into service at a U.S. job site. Depending on the selected Incoterm, the buyer may still need to arrange and pay for:
Pickup and domestic transport in the country of export;
Export customs clearance and origin terminal handling;
Ocean freight and cargo insurance;
U.S. port, terminal, brokerage, and bond charges;
Import duties, Section 301 tariffs, and any applicable AD/CVD treatment;
U.S. inland delivery from the port to the buyer's yard or job site.
For this reason, a lower EXW or FOB quotation is not automatically the lowest-cost option. It may simply transfer more cost, coordination work, and customs risk to the buyer.
Use the following formula when comparing supplier quotations:
Total Landed Cost = Machine Price + Export Logistics + Ocean Freight & Insurance + Import Duties + Customs Fees + U.S. Inland Delivery
Before comparing two offers, confirm that they use the same:
Machine model and configuration;
Working height and platform specifications;
Quantity and destination ZIP Code;
Delivery timing;
Duty and tariff assumptions;
Importer of Record arrangement;
Inland delivery scope.
| Cost item | Illustrative standard scenario | Illustrative high-duty scenario |
|---|---|---|
| Machine price | $30,000 | $30,000 |
| Ocean freight and insurance | $3,000 | $3,000 |
| Customs and terminal handling | $2,000 | $2,000 |
| U.S. import duties and tariffs | $3,000 — illustrative 10% | $30,000 — illustrative 100% |
| Estimated total landed cost | $38,000 | $68,000 |
This example shows why tariff treatment can change the purchase decision. The figures are for illustration only. Actual rates and treatment depend on the specific machine, technical characteristics, HTS classification, country of origin, manufacturer, exporter, current U.S. trade measures, and customs requirements. Buyers should confirm the final treatment with a licensed U.S. customs broker before ordering.
Each Incoterm controls a different part of the delivery chain:
FOB transfers responsibility after the goods are loaded on board at the port of shipment.
CIF includes ocean freight and insurance to destination port, but import duties remain with the buyer.
EXW usually gives the supplier the least responsibility and the buyer the most logistics work.
DDP provide the highest price predictability because the seller arranges delivery, import clearance, duties, and final-mile transportation to the agreed destination. The quote must still be checked for compliance and scope.
Before issuing a purchase order, ask the supplier to itemize:
Exact machine model, platform height, outreach, and power source;
Machine price and quantity;
Export inland transport and origin charges;
Ocean freight and cargo insurance;
Destination port and terminal charges;
Brokerage, customs bond, and storage assumptions;
HTS classification and duty assumptions;
Section 301 or AD/CVD trade-remedy treatment;
The legal Importer of Record;
U.S. inland delivery trucking method.
The Key DDP Question:
"Is this a fixed, all-inclusive delivered price, and exactly which party is the legal Importer of Record for U.S. Customs?"
COST ALERT: Before comparing two DDP prices, confirm that both quotes include the same duties, customs scope, Importer of Record, and final-mile delivery.
