MPF and HMF: the customs fees importers forget

Most first-time importers price a shipment by adding freight to the supplier invoice and calling it done. Some remember duty. Almost nobody remembers the two federal fees CBP charges on top of that: the Merchandise Processing Fee and the Harbor Maintenance Fee. Neither is large alone. Together, they're a mandatory line item CBP will collect whether or not you budgeted for it — and they trip up new importers more than the duty rate does, simply because nobody warns you they exist.

This guide covers what each fee is, how it's calculated, where the money comes from — customs value, not the invoice price you might assume — and how the two behave differently depending on how your goods arrive in the country.

What is the Merchandise Processing Fee (MPF)?

The Merchandise Processing Fee is what CBP charges to process your entry paperwork. It's an ad valorem fee, which just means it's calculated as a percentage of value rather than a flat charge per shipment. For formal entries — broadly, commercial shipments above the informal-entry threshold — the rate is 0.3464% of the customs value of the goods.

That percentage sounds simple, but MPF has a wrinkle most duty rates don't: it's bounded. CBP sets a minimum and a maximum fee per entry, adjusted every fiscal year for inflation. On a small entry, you pay the flat minimum even if 0.3464% of the goods would work out to less. On a very large entry, the fee is capped, so a $2 million shipment doesn't keep scaling forever — it hits the ceiling and stops.

• Rate: 0.3464% of customs value, for formal entries.
• Minimum and maximum: set per entry, adjusted every fiscal year — always check the current figures before you rely on a number.
• Informal entries (generally shipments valued at $2,500 or less) pay a smaller flat MPF instead of the percentage rate.
• Charged per entry, not per line item — how you consolidate shipments into entries can change the total you pay.

What is the Harbor Maintenance Fee (HMF)?

The Harbor Maintenance Fee funds dredging and upkeep of US ports and harbors — the channels have to stay deep enough for container ships, and someone has to pay for that. HMF is 0.125% of customs value, and the condition that catches people out is the mode of transport: it only applies to commercial cargo that arrives by vessel. Air freight doesn't pay it. Trucked-in cargo crossing a land border doesn't pay it either. Only ocean cargo does.

Unlike MPF, HMF has no floor and no ceiling — it's a flat 0.125% on every ocean entry, whether the shipment is worth $3,000 or $3 million. There's also a historical quirk worth knowing: HMF used to apply to exports too, until the Supreme Court ruled in 1998 that taxing exports this way violated the Constitution's Export Clause. Since then it's only ever been charged on imports and certain domestic waterborne movements.

• Rate: 0.125% of customs value, flat — no minimum, no maximum.
• Applies to: commercial cargo arriving by vessel at a US port.
• Does not apply to: air freight or land-border entries.
• Scales linearly with value, so it's easy to estimate without a lookup table.

How is customs value calculated in the first place?

Both fees are ad valorem — a percentage of customs value, sometimes called the entered value — so it matters enormously how that value is worked out. Get it wrong and every fee, plus duty itself, is wrong along with it.

The primary method, used for most commercial imports, is transaction value: the price actually paid or payable for the goods when sold for export to the US, plus a short list of required additions. Those typically include assists (tooling or materials you supplied to the factory free or at reduced cost), certain packing costs, and royalties tied to the sale. Whether freight and insurance are already inside that price depends on your Incoterms — a CIF price includes them, an FOB price doesn't — which is why two shipments with an identical invoice total can still land at different customs values.

Transaction value isn't always usable. Where there's no genuine sale — related-party deals where price might be influenced by the relationship, consignments, or goods brought in for testing — CBP falls back to alternative methods, applied in order. Deductive value works backwards from the US resale price, minus post-importation costs. Computed value builds the figure up from materials, fabrication and profit reported by the producer. Both exist for the cases where transaction value can't honestly be used, and both need more paperwork than a simple invoice.

A worked example

Take an Ohio outdoor-furniture importer bringing in a container of teak patio sets from Vietnam, arriving by ocean at the Port of Long Beach. The commercial invoice — and the customs value, since the deal is FOB with no assists or royalties — comes to $42,000. On a shipment that size:

• MPF: 0.3464% of $42,000 = about $145.49, comfortably inside the annual cap.
• HMF: 0.125% of $42,000 = $52.50, because the goods arrived by vessel.
• Combined fees: roughly $198, before duty and any Section 301 or 232 measures are added.

Now compare a smaller electronics shipment flown in from Taiwan, customs value $15,000. MPF works out to about $51.96 — but if that's below CBP's current per-entry minimum, the flat floor applies instead, so the actual charge could be higher than the percentage suggests. Because it came by air, HMF simply doesn't apply. Same importer, same origin country, two different fee profiles, purely down to mode of transport.

Customs brokers describe MPF and HMF as the fees clients forget twice — once when they're budgeting a shipment, and again when they're reconciling the entry summary and can't work out where the extra few hundred dollars came from. Neither fee is complicated once you know the rate and the conditions; the problem is that almost nobody tells new importers to look for them.

Do MPF and HMF apply to every shipment?

MPF applies to nearly every commercial entry, formal or informal, though informal entries below the $2,500 threshold pay a smaller flat fee instead of the percentage rate. HMF is narrower: it only applies to ocean cargo, so anything arriving by air or over a land border with Canada or Mexico skips it entirely. Split volume across modes — some ocean, some air — and your fee profile will differ shipment to shipment even for identical goods from the same supplier.

Both fees are calculated on customs value only. Freight and insurance charges that sit outside the customs value — an FOB shipment's ocean freight, for instance — aren't part of the base either fee is calculated against, even though that same freight cost absolutely belongs in your landed-cost total.

How MPF and HMF fit into your landed cost

Neither fee alone will sink a deal. What sinks deals is forgetting several small mandatory costs at once — MPF, HMF, brokerage, a bond premium — and finding the gap only once the entry summary lands and margin has already been quoted. Individually, they're rounding errors. Stacked across a year of shipments, they're a real, budgetable cost that belongs in your unit economics from the first quote.

Most regular importers also carry a continuous customs bond, covering the government's exposure across all entries for the year instead of posting a single-entry bond every time. It's a separate cost from MPF and HMF, but the same category of fee people underestimate until the renewal invoice arrives.

Quick reference

• MPF = 0.3464% of customs value, subject to an annually-adjusted minimum and maximum, charged on all modes of transport.
• HMF = 0.125% of customs value, ocean freight only, no minimum or maximum.
• Both sit on top of base duty and any Section 301 or 232 measures — they don't replace or reduce it.
• Both are calculated on customs value, not on freight, insurance or your retail price.
• Customs value is usually transaction value — the price actually paid or payable, adjusted for assists and packing — with deductive and computed value as fallback methods.

Rates here reflect the standard statutory percentages current at time of writing; MPF's minimum and maximum change annually and HMF's export exemption reflects a 1998 Supreme Court ruling that remains in force. None of this is legal, customs or tax advice — confirm the current figures and how they apply to your specific entry with CBP or a licensed customs broker before you file.