Landed Robot Costs

The cost lines inside a landed quote

A landed cost is the full amount you pay to get a robot to your site and cleared for use. Start with the ex-works price, then add export packing and crating, charges at the origin port or airport, main freight, cargo insurance and destination handling. Customs brokerage, import duty and import taxes such as VAT or GST follow, along with inland delivery and any unloading equipment. Robots with lithium battery packs can attract dangerous-goods paperwork and handling fees, so ask the maker how each pack is classified for transport. Request every line in your own currency with the exchange rate stated, and ask which items are estimates. A quote that folds several costs into one logistics figure is hard to check later.

How Incoterms decide who pays what

The International Chamber of Commerce publishes Incoterms 2020 as a set of eleven three-letter trade terms for business-to-business sales, and the term written into your contract fixes where the seller's costs and risk end. Under EXW you collect the robot at the maker's premises and pay for everything after that. FCA and FOB move the handover to a carrier or a ship at origin. CIF and CIP put main carriage and insurance on the seller's side, although risk passes to you at origin, earlier than many buyers expect. DAP brings the robot to your named place with import clearance left to you, while DDP has the seller pay duties and taxes as well. Convert every offer to the same term before comparing totals.

Customs value, classification and duty rates

Duty is usually charged as a percentage of a customs value, so how that value is set matters. The US International Trade Administration's guide to the WTO Customs Valuation Agreement explains that the primary basis is the transaction value, the price actually paid for goods sold for export, with defined additions such as commissions, packing costs, buyer-supplied tools and molds, and royalties or license fees tied to the goods. Each country decides whether freight and insurance to the port of import belong in that value. GOV.UK guidance for the UK covers which delivery costs to include and how the VAT value is worked out from the customs value. The duty rate itself depends on the tariff code, so agree the classification with your broker before you order.

Building your own landed cost sheet

Keep a simple spreadsheet for every robot order. Give each cost line its own row, mark who pays it under the agreed Incoterm, and note whether the figure is quoted, estimated or still unknown. Add the customs value calculation separately, so you can see how freight and royalties feed into duty and import tax. For a fleet, split shared costs such as a container or a broker's fee across the units by value or by volume, and choose the method before the quotes arrive. Leave a line for storage or demurrage in case clearance stalls, and another for currency movement between order and payment. Replace estimates with actual invoices once the robot lands, then use the finished sheet to test the next quote.

Sources and further reading

• Trade Guide: WTO Customs Valuation Agreement — International Trade Administration, US Department of Commerce.
  Explains transaction value, the costs customs may add to it and each country's choice on freight and insurance.
• Incoterms 2020 — International Chamber of Commerce.
  ICC's overview of the eleven trade terms that fix where a seller's delivery costs and risk end.
• How to value your imports for customs duty and trade statistics — GOV.UK.
  UK guidance on which delivery costs enter customs value and how the import VAT value is worked out.

Common questions

What is the difference between a landed cost and a DDP price?

A DDP price is the seller's offer to deliver the robot to your named place with import duties and taxes paid. Your landed cost also counts anything that offer leaves out, such as unloading equipment, site handling or disposal of crates, so the two figures can differ even on a DDP deal.

Who pays import VAT when a robot is shipped DAP?

Under DAP the seller delivers to your named place but stops short of import clearance, so you or your customs broker pay the duty and import tax. Businesses registered for VAT or GST may be able to recover that tax later, depending on local rules, so check with your tax adviser.