Supply Chain

Landed Cost Math in 2026: Why the Unit Price Is the Least Important Number

The unit price wins the quote and loses the deal. Landed cost, freight and duty and currency and the inventory a long lane forces you to hold, is the number that decides which source is actually cheapest.

Landed cost is the total cost to get a part from a supplier's dock to your usable inventory: unit price, freight, insurance, duties, brokerage, and the carrying cost of the extra inventory a longer supply line forces you to hold. It is the only fair basis for comparing sources, and it routinely reverses the ranking a unit-price comparison produces. The low-unit-price source from across an ocean can lose to a nearshore source once the freight, the duty, and the six weeks of in-transit inventory get priced. This is the calculation that should decide sourcing, and the pieces that move the most are freight, tariffs, and currency.

The five layers of a landed cost

What actually stacks between the quote and your inventory

The currency line, updated

Currency is the layer buyers most often treat as fixed and it is the one that moves without warning. As of Aug 7, 2026, the Mexican peso trades at 17.1357 per US dollar (with no prior-year reading archived yet) and the Chinese yuan at 6.7474 (with no prior-year reading archived yet). A landed-cost model built at last quarter's rates can rank two sources incorrectly today purely on the currency line, no other input changed. That is why a landed-cost calculation is not a one-time exercise but a living model: the freight and duty layers change with policy, and the currency layer changes with the market, sometimes daily.

The unit price starts the argument. The landed cost, currency and all, ends it, and the ending has flipped more sourcing decisions than any negotiation.

Making the comparison honest

To compare two sources fairly, build the full stack for each and refresh the volatile layers at decision time. Price the freight for the actual lane and mode, apply the current duty schedule, convert at today's exchange rate, and add a carrying charge for the pipeline inventory each lane requires. Only then are the two numbers comparable. Done this way, the comparison often surprises: the nearshore premium on unit price is frequently smaller than the ocean freight, duty, and inventory penalty on the far-shore alternative, which is the quantitative core of the reshoring case when it holds, and the reason it sometimes does not.

The currency leg, six years of it

Across the five-year record the peso is still working down from a peak rather than building a new level. The high came at the close of 2024 near 20.8557, and today's 17.1357 sits 18% below it, the lowest since May 31, 2024. That gap is the fact worth carrying, because the reference point most people hold in their heads is the peak, and the record has spent years saying the peak was the anomaly.

Use the total landed cost calculator to build the full stack for each source with current freight, duty, and currency inputs. Calculate landed cost

Published 2026-08-05.