Your factory price is just the starting point — your actual cost of landing goods in Australia can be 30–40% higher. This guide breaks down every component of landed cost for Australian importers in 2026, including a worked example and what's changed this year.
For years, I've watched Australian businesses get blindsided — not by dodgy suppliers or delayed containers — but by a number they never calculated properly. The landed cost.
They'd negotiate a great FOB price with a Chinese factory, do a little happy dance, then find out their "great deal" barely scraped a margin once freight, duty, GST, and a dozen other line items hit the account. It's one of the most common — and most preventable — pain points in the game.
Here's the truth: the factory price is just the starting point. Your actual cost of getting that product into your warehouse in Sydney or Melbourne is your landed cost. And if you don't calculate it accurately before you place your order, you're flying blind.
This guide breaks down every component of your landed cost in 2026, walks you through the formula, and shows you what's changed this year that every Australian importer needs to know about.
Landed cost is the total cost of a product from the moment it leaves the factory gate in China (or Vietnam) to the moment it arrives at your warehouse door in Australia. It's the number that tells you whether your business is actually profitable — or whether you're spending $18 to sell something for $20.
The landed cost formula looks like this:
Landed Cost = Factory Price + Inland China Freight + Origin Charges + International Freight + Insurance + Destination Port Charges + Customs Duty + GST + DAFF Fees + Domestic Cartage
This is what your supplier quotes you. Most Chinese suppliers will quote either FOB (Free on Board) — meaning they cover costs until the goods are loaded onto the ship — or EXW (Ex Works) — meaning you pay for everything from the factory door.
If you're getting an EXW quote, make sure you're adding inland freight from the factory to the port. For a factory in Dongguan, that might be AUD $150–300 per CBM.
Pro tip: Always confirm the Incoterms in writing. An FOB quote from a reliable supplier is usually the cleanest starting point for your landed cost calculation. Understanding FOB shipping terms is essential reading before you sign off on any supplier quote.
In 2026, freight costs are one of the most volatile components of your landed cost. Fuel surcharges are accelerating, and major carriers have implemented Emergency Bunker Surcharges — with MSC, ANL, and others adding USD $300–600 per container on routes from Asia to Australia.
Sea Freight (FCL/LCL): A 20ft container from Shanghai to Sydney currently runs approximately AUD $1,800–3,200, before surcharges. Surcharges in 2026 can add another 15–25% on top of base rates. LCL is charged by CBM, typically AUD $80–150 per CBM.
Air Freight: Fast but expensive — expect AUD $6–12 per kg depending on route and carrier. Best for small, high-value, or time-sensitive shipments.
For the most current freight cost breakdown, our guide on what's happening to freight costs in 2026 has the full picture.
Never skip this. Cargo insurance typically runs 0.3–0.5% of the CIF value (Cost + Insurance + Freight). On a $50,000 shipment, that's roughly AUD $150–250. It's cheap protection against a scenario that can wipe out months of profit.
These are the fees charged at the Chinese port before your goods depart. They include documentation fees (Bill of Lading, export customs): AUD $100–200; THC (Terminal Handling Charges): AUD $150–300 per container; and container seal fees, fumigation (if required): AUD $50–150.
Australia calculates customs duty on the CIF value — that means the cost of the goods plus the freight and insurance to get them here. Most goods from China attract a 5% duty rate, though it varies by HS code. Under ChAFTA, many Chinese-origin goods now qualify for zero or reduced duty — but you need a valid Certificate of Origin.
Duty Calculation Formula: Duty = (FOB Price + Freight + Insurance) × Applicable Duty Rate
Australia applies 10% GST on the customs value plus duty: GST = (CIF Value + Duty) × 10%. GST is recoverable as an input tax credit if you're registered for GST — so for most businesses, it's not an out-of-pocket cost, just a cash flow consideration.
The Australian Border Force charges an Import Processing Charge: AUD $50 for electronic lodgement under $10,000, and AUD $152 for electronic lodgement over $10,000.
The Department of Agriculture, Fisheries and Forestry (DAFF) charges biosecurity levy fees on imported goods, particularly those made from natural materials (wood, bamboo, rattan, natural fibres). DAFF fees can range from AUD $50 to several hundred dollars depending on your product category. Working with an experienced customs and freight forwarding team will help you anticipate which products are likely to trigger DAFF attention.
Once your container arrives at Sydney or Melbourne, you'll face THC at destination (AUD $200–350), port storage if you don't pick up promptly (AUD $100–300 per day after free time expires), and cartage from port to your warehouse (AUD $300–600 for local metro delivery).
Unless you're lodging your own customs entries (not recommended for most SMEs), you'll need a licensed customs broker. Typical fees: entry lodgement AUD $150–250 per shipment, plus delivery orders and communication fees AUD $50–150 additional.
Let's say you're importing 500 units of a home décor product from a factory in Guangzhou. Factory price (FOB): $15,000 | Inland freight to port: $200 | Origin documentation/THC: $300 | Sea freight (LCL, 5 CBM): $650 | Freight surcharges (est. 20%): $130 | Insurance: $80 | Destination THC: $280 | Customs duty (5% on CIF): $820 | GST (10% on CIF + duty): $1,718 | DAFF fees: $200 | Import Processing Charge: $152 | Customs broker: $220 | Domestic cartage: $400 | Total Landed Cost: $20,150 | Per Unit Landed Cost: $40.30
The factory price was $30/unit. The landed cost is $40.30/unit — a 34% uplift. If you'd priced your product based on the factory quote alone, you'd be in trouble.
Fuel and Bunker Surcharges Are Elevated: Middle East tensions are disrupting shipping routes and driving fuel costs higher. Build in a 15–25% buffer on top of your quoted base freight rate.
ChAFTA Advantage — But You Need the Paperwork: Under ChAFTA, many products from China now attract 0% duty. But to claim it, your supplier must provide a valid Certificate of Origin. Don't assume — ask for it upfront.
More Scrutiny on Natural Materials: DAFF biosecurity inspections have increased on goods containing wood, bamboo, rattan, and natural fibres. Build in inspection fees and potential delays.
1. Consolidate shipments. Once your volumes justify it, moving to FCL dramatically cuts your per-unit freight cost. 2. Get proper HS code classification. A wrong classification can mean overpaying duty or triggering an audit penalty. 3. Use ChAFTA properly. Make sure your supplier issues the right documentation — our Out Source service includes CoO documentation as standard. 4. Work with experienced freight partners. A good freight forwarder knows which carriers have the best rates and which surcharges are negotiable. 5. Use professional sourcing support. Our Secret Source service for custom manufacturing ensures pricing transparency from day one.
Landed cost is the number your business actually runs on. Get it right, and you can price competitively, protect your margins, and scale with confidence. Get it wrong, and you'll be wondering why your "profitable" product is quietly eating your cash.
Book a free discovery call with our team and let's crunch your landed cost numbers together. Or grab our free ebook on importing from China to go deeper on the fundamentals.
G'day, and source smarter.
Epic Sourcing Australia — Sydney-based sourcing agents with teams on the ground in China and Vietnam. Helping Aussie businesses import smarter since 2019.
