Merchandise Processing Fee and Harbor Maintenance Fee

Merchandise Processing Fee and Harbor Maintenance Fee

If you are new to importing goods in the US, there are many regulations, requirements, restrictions, and fees to consider. Two of the most important fees that we often get questions about are the Merchandise Processing Fee or the Harbor Maintenance Fee. The MPF and HMF are two of the most common maintenance fees you will come across when dealing with customs brokerage for imported cargo. Read on to learn all about how to calculate Harbor Maintenance fees and Merchandise Processing fees for your import shipments.

When you must pay a Merchandise Processing Fee or Harbor Maintenance Fee, the last thing you want to do is make a mistake.

Merchandise Processing Fee (MPF)

The Merchandise Processing Fee (MPF) is a fee you must pay to the US Customs and Border Protection (CBP) when you pay the duties and taxes on your shipment’s entry summary. However, there are exemptions to the rule like importing cargo under the many Preferential Trade Programs the U.S. has with certain countries. If you are unsure you can check the list of preferential trade agreements or visit the World Trade Organization website. The MPF is required for the following cargo types:

  • Air cargo
  • Ocean freight
  • International mail

The MPF is determined by the “entered value”, or “declared value” of your merchandise.  It is in proportion to the fee calculated for formal entries at 0.3464 percent. Formal entries are commercial cargo valued at $2,500 or more. When you are calculating the MPF you do not include the following:

  • Cargo insurance
  • Freight value
  • Duty on the shipment

In addition, the Merchandise Processing Fee must be over $26 and less than $509. So, when calculating your MPF, if you exceed $509, you only pay this maximum amount.

Additionally, there are individual fees for informal entries, ranging from $2.00, $6.00, or $9.00 per shipment. An informal entry may also include personal use imports but will always be valued at less than $2,500. One way you can figure out if you owe the MPF is to check with the MPF Table per the US Customs and Border Protection. Another solution is to choose a trusted freight forwarding company like BGI with a proven track record to help you with importing goods into the US.

Harbor Maintenance Fee (HMF)

According to the US Customs and Border Protection, the Harbor Maintenance Fee is required at certain ports for the following types of cargo:

  • Imported freight
  • Domestic shipments
  • Foreign-Trade Zone (FTZ) admissions
  • Passengers

You will notice that the Harbor Maintenance Fee is not charged on air freight. In addition, the HMF fee has not been collected on exported freight since 1998. The amount that is charged is .125 percent of the value of the cargo in transit. The purpose of the HMF is to help cover the costs of maintaining our nation’s ports and harbors. Therefore, the money taken from the HMF is put into the Harbor Maintenance Fund that is controlled by Congress.

How to Handle Processing Fees

When you must pay a Merchandise Processing Fee or Harbor Maintenance Fee, the last thing you want to do is make a mistake. Take care when calculating the fees to ensure that they are correct. If in doubt, choose BGI to manage your import shipments. You will get a dedicated and experienced team of logistics specialists to help guide you through the maze of import regulations, fees, and requirements.

Depend on BGI Worldwide Logistics

To find out more about other ways we can help, check out the broad range of freight forwarding and logistics services on our website. BGI Worldwide Logistics offers over the road services including less than truckload (LTL) and Full Truckload (FTL) trucking, intermodal rail, and oversized freight, as well as FBA imports to Amazon and cross-border cargo. Based in Signal Hill, California, we work with clients globally.

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Call Toll Free: 800-987-4244

Amazon FBA Freight Forwarder

Amazon Associates participating in the Amazon Affiliate Program make hundreds of thousands of dollars each year by buying products from overseas and then shipping them to Amazon fulfillment centers for delivery to their customers. By this means, Amazon Affiliates leverage the unquestionably huge reach of the Amazon marketing behemoth selling through FBA (Fulfillment by Amazon), and make sliding scale commissions based on the sale price of each item and their volume of sales…that is if they do it right and don’t make a lot of mistakes along the way.

While you can make big money in the Amazon Affiliate program, you can also lose money. Competition is fierce.

“One of the biggest mistakes you can make in deciding to participate in the Amazon Affiliate Program is not taking time to learn everything you can about the business.”

 

Starting out is slow. Plus, if you think shipping in and around the U.S. is tricky, wait until you see the pitfalls of importing product for the Amazon Affiliate program or FBA, which might just as well stand for “Fundamentally Bewildering Activity.” Why?

It’s complicated.

3 Ways to Avoid Going Broke.

  1. Proceed with caution and patience.
  2. Know what you need to know.
  3. Know that you don’t need to know it all, but that someone you trust does.

#1. Proceed with caution and patience.

One of the biggest mistakes you can make in deciding to participate in the Amazon Affiliate Program is not taking time to learn everything you can about the business. You can start by looking at the big picture by checking out the following (1) Amazon’s rules for shipping to Amazon; (2)  United States laws for importing into the U.S. (3)  Importing and Exporting Inventory advice from Amazon.

#2. Know what you need to know.

In addition to being cautious and knowing the big picture, you should be aware of how you can lose money. Here are some examples: (1) Not studying the market you’re selling into; (2) Not knowing the product you’re selling; (3) Not vetting the manufacturer or exporter (their rules for doing business, language barriers, etc.); (4) Not insisting on product quality; (5) Not knowing about tariffs, classes, carriers, base rates and tons of other logistics considerations.

#3. Know that you don’t need to know it all, but that someone you trust does.

You can do your homework on the market, products, manufacturers, etc., but learning about shipping and logistics will really challenge your patience. Instead, don’t blow all your hard-earned capital on mistakes made on mismanaged first, second, and third shipments to Amazon.

By finding a logistics company that fits your company’s style, sense of urgency, and values (see our white paper “5 Tips: Choosing the Best 3PL for Your Shipping Needs”), you can start to know what you’re seeking in a freight forwarding company.  Then, by having an expert supply-chain management company like BGI Worldwide Logistics, Inc. on your team, you can feel comfortable that someone does know how to do this right the first time.

You can try to learn all of the laws yourself, but as we said, it’s complicated.  Here’s how you’ll know you can trust us:  (1) We have handled many successful Amazon Affiliate import shipments and have developed a reputation as the “go-to” company in this niche. (2) We have saved businesses and individuals that experienced big problems from other companies.  (3) We have facilitated Amazon Affiliate importing transactions by taking care of customs clearance and logistics.

Conclusion:

To avoid going broke in this niche, do your homework. Proceed with caution and patience. Know your customer, your product, and the players. Find a trusted logistics company with a proven track record in this niche to help you with importing.

BGI Worldwide Logistics, Inc. will help you get it right the first time.

Got questions? Call 800-987-4244 for more information.

Use our essential Amazon Affiliate Import Checklist  to assist you with filling out the rate request form.

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