The Harbor Maintenance Fee (HMF) and Merchandise Processing Fee (MPF) are two fees that are often overlooked, hence springing as a surprise for shippers when they receive their invoices. Although the two fees may be smaller charges, it is still important to take them into consideration when preparing for shipments. These are common maintenance fees that forwarders often come across when dealing with customs brokerages for imported cargo goods.
What is Harbor Maintenance Fee (HMF)?
The Harbor Maintenance Fee is imposed by the U.S. Customs and Border Protection for imported cargos via ocean freight only. Moreover, Harbor Maintenance Fee has not been charged on exported cargo since 1998. Created by the Water Resource Act in 1986 to share the costs of harbor construction, inland waterway transport, and flood-control projects, the Harbor Maintenance Fee helps with port and harbor maintenance.
What Types of Packages Are Required to Pay For the Harbor Maintenance Fee?
The Harbor Maintenance Fee is required for the following packages:
- Imported cargos
- Passengers on cruise ships
- Foreign-Trade-Zone admissions
- Domestic shipments
It is important to keep in mind that all shipments will be subjected to the Harbor Maintenance Fee even if they are a part of a trade agreement such as USMCA.
How is Harbor Maintenance Fee Calculated?
Calculation: The Harbor Maintenance Fee is charged at 1/800 or 0.125% of the cargo value in transit.
What is Merchandise Processing Fee (MPF)?
Unlike the Harbor Maintenance Fee that is only imposed on ocean freight, both air and ocean cargo are subjected to the Merchandise Processing Fee. It is also a fee imposed by the U.S. Customs, usually paid when you pay taxes and duties on your shipment’s entry summary. There are exemptions to the Merchandise Processing Fee: the fee is waived for packages that qualify certain Free Trade Agreements (FTA) such as NAFTA and CAFTA.
What Types of Packages Are Required to Pay For the Merchandise Processing Fee?
The Merchandise Processing Fee is required for the following packages:
- Air cargo
- Ocean cargo
- International mail
How is the Merchandise Processing Fee Calculated?
Calculation: The Merchandise Processing Fee is determined by the “entered value” or “declared value” of the merchandise. The Merchandise Processing Fee is imposed at 0.3464% of the cargo value on the commercial invoice. In other words, it is composed of a minimum of $27.23 and a maximum of $528.33 per entry. However, if the value of the merchandise is declared at less than $2,500, the Merchandise Processing Fee is a $2.18 flat rate. It does not include freight value, cargo insurance, and duty on shipment as part of the calculation.
SFI
When paying fees such as Harbor Maintenance Fee and Merchandise Processing Fee, it is crucial to not make any mistakes, so leaving it to the professionals is your best bet. If you’re in need of a freight forwarding agent, talk to SFI today and we will provide you with the best possible quotes for all your shipping needs.
Email us at [email protected] or call us at (909) 594-3400.
