Total landed cost

If duties and taxes are not prepaid, the carrier must collect these from the end consumer when they deliver the shipment. UPS charges a fee for this service, called a COD fee.

If you request estimated duties and taxes from the UPS® Global Checkout API, COD fees are included. However, these are only estimates. If you request a guaranteed landed cost from the UPS® Global Checkout API, COD fees are typically not included, as they will not be charged (there will be nothing for the carrier to collect upon delivery). Instead, all duties and taxes will be prepaid.

Requiring the consumer to pay extra fees when their shipment is delivered often leads to upset customers. To avoid this, some shippers either subsidize these costs or collect them upfront (such as in the checkout alongside shipping costs). The end consumer gets their package delivered without being asked to pay anything extra first.

This change in process requires UPS to front the money for duties and taxes to pay the local customs agency during transit. They usually charge a Disbursement Fee for this service. The fee is usually a percentage of the amount they fronted or a flat rate (in the destination currency), whichever is greater. These fees can frustrate shoppers because they are not well-disclosed by carriers or online retailers.

The impact of the Disbursement Fee on your international customers' imports can be very high. It can sometimes be higher than the tax, duty, or both combined. Also, to compound the issue, these charges are subject to VAT. Below, you will find an example.

Disbursement Fee example

Here's an example of how a Disbursement Fee is applied: A UPS shipment to France will incur 2.5% of the advance or 14 EUR (whichever is greater).

As explained in the Disbursement Fee section, UPS still has to front money to the local customs authority when duties and taxes have been prepaid. Most carriers collect their fee for this service through the Disbursement Fee. However, when this money is fronted, UPS also has to handle billing the duties and taxes back to the shipper. UPS charges for this service separately.

UPS' Duty and tax forwarding surcharge is USD 15.

UPS charges brokerage fees on ground shipments into Canada. UPS Standard to Canada charges a brokerage fee called an “Entry Preparation Fee.”

Brokerage fee example

UPS does not charge brokerage fees on international air shipments into Canada, but will still charge the Disbursement Fee (see "Disbursement Fee" above).

The importing country may have fees assessed on certain shipments. These fees can be assessed for a wide variety of reasons, but usually represent services rendered by various government departments for things such as clearance, approval, inspection, storage, quarantine, processing, etc.

Country-specific fee examples

A broker usually spends more time clearing a shipment with a long list of items compared to a shipment with a single item. To account for this, UPS will add fees when more than a certain amount of items are in a shipment. This is called an additional tariff line item fee.

UPS includes additional tariff line item fees in our calculations when applicable.

Additional tariff line item fee example

Here's an example of an Additional tariff line item fee. A UPS shipment to Japan would incur 400 JPY per additional tariff line exceeding five lines.

Most carriers have a foreign exchange (FX) fee when converting from the destination currency back to the billing currency. These FX fees are usually mentioned in the carrier's terms and conditions, not listed as a separate line item. The fee varies from carrier to carrier, and from country to country.

UPS has chosen to take a simplified approach to foreign exchange costs. We calculate a transparent 4% FX fee that is built to absorb the carrier's fees and account for FX risks that happen when currencies get exchanged multiple times on a transaction, e.g., Converted at import by the broker and then again by the carrier for billing.

UPS also guarantees our calculations for 90 days, given that the journey from order placement to order delivery can take time, during which FX can change. The 90-day window allows our customers to present a quote to their shoppers with cost certainty and have 90 days to fulfill the order before the order needs to be re-quoted.

Carriers or customs may apply other fees to an international shipment. For example, the clearance of certain goods into the United States may involve government bureaus like the U.S. Food and Drug Administration (FDA). This additional handling could result in additional charges from those agencies.

Other fee examples

If you are aware of a fee that could be charged on your import, please notify us to ensure the correct landed cost calculation.