Merchandise Processing Fee and Harbor Maintenance Fee
When you must pay a Merchandise Processing Fee or Harbor Maintenance Fee, the last thing you want to do is make a mistake.
Two of the most important fees that we often get questions about are the Merchandise Processing Fee (MPF) and the Harbor Maintenance Fee (HMF).
The MPF and HMF are two of the most common maintenance fees you will come across when dealing with customs brokerage for imported cargo.
If you are new to importing goods in the US, there are many regulations, requirements, restrictions, and fees to consider.
Read on to learn all about how to calculate Harbor Maintenance fees and Merchandise Processing fees for your import shipments.
What is The Merchandise Processing Fee?
The Merchandise Processing Fee is an “Ad valorem” tax, meaning that it is based on the assessed value of goods. The MPF is calculated as proportionate to the estimated value of the goods or transaction.
The MPF is a payment that must be tendered to the U.S. Customs and Border Protection (CBP) when shipping freight to the United States. It is one of the fees paid along with the duties and taxes on your shipment’s entry summary. So it is important to remember to factor the MPF into your freight expense.
However, there are several exemptions to the rule like importing cargo under the many Preferential Trade Programs the U.S. has with certain countries.
If you are unsure about whether you qualify for an exemption, you can check the list of preferential trade agreements or visit the World Trade Organization website.
The MPF is required When:
- Importing Air cargo
- Ocean freight Imports
The MPF fee 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%.
Formal entries simply mean 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
What is The maximum MPF?
The maximum amount of the Merchandise Processing Fee is $528.33 and the minimum is $27.23 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, and generally do not require a CBP bond.
You can figure out if you owe the MPF processing fee by checking the MPF Table per the U.S. Customs and Border Protection agency.
What Is The Harbor Maintenance Fee (HMF)
The Harbor Maintenance Fee was borne out of the Water Resources Development Act approved by Congress in 1986.
The main purpose of the WRDA act was to help the U.S. government cover the costs of maintaining our nation’s ports and harbors by sharing the costs with the U.S. government.
Money taken from the HMF fee is put into the Harbor Maintenance Fund which is controlled and distributed by Congress.
The main purpose of the Harbor Maintenance Fee is to help cover the costs of maintaining our nation’s ports and harbors.
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
How Much Is The HMF Fee?
The chargeable amount for the HMF is 0.125% of the value of the cargo in transit.
The Harbor Maintenance Fee is not charged on air freight, and it is interesting to note that the HMF fee has not been collected on exported freight since 1998.
How To Calculate the Harbor Maintenance Fee
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 Worldwide to manage your import shipments and Customs brokerage.
You will get a dedicated and experienced team to help guide you through the maze of import regulations, fees, and requirements.
You Can Depend On BGI
To find out more about other ways we can help, check out the broad range of special freight services and logistics services on our website.
BGI offers International freight forwarding services, over-the-road shipping including less than truckload (LTL) and Full Truckload (FTL) trucking, intermodal rail, and oversized freight, as well as FBA imports to Amazon , warehousing, distribution, and cross-border cargo.
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