Packing Costs are the costs of all containers and coverings of whatever nature, and the cost of packing (labor and materials), incurred by the buyer in preparing the imported merchandise ready for shipment to the United States. They are a statutory addition to the price actually paid or payable under 19 U.S.C. § 1401a(b)(1)(A) when not already included in the invoiced price.
Packing costs are dutiable regardless of whether the packing is:
- Performed at the factory or at a third-party packaging facility
- Returnable (e.g., reusable wooden crates) or one-way
- Inside or outside the master shipping carton
Examples include:
- Inner cartons, dividers, and protective foam
- Master shipping cartons
- Pallets, strapping, shrink wrap
- Anti-corrosion coatings applied for transit
- Labor to pack the merchandise for export
International freight and insurance are not packing costs and remain non-dutiable. Likewise, "instruments of international traffic" (ocean containers, certain reusable platforms) registered under 19 CFR § 10.41a are excluded.
If the seller invoices a single "FOB" price covering both merchandise and packing, the packing cost is already in the price and no further addition is needed. If the buyer separately procures packaging — for example, by supplying corrugated boxes directly to the factory — those packaging materials are either packing costs (if billed) or assists (if supplied free or at reduced cost).