Merchandise Processing Fee (MPF)
Merchandise Processing Fee (MPF) A fee assessed by U.S. Customs and Border Protection on most imported merchandise to recover the costs associated with processing and documenting imports. The fee is calculated as a percentage of the import value, subject to minimum and maximum thresholds.
Latest Update (January 2025)
CBP has announced that the MPF rate will remain at 0.3464% for fiscal year 2025, but minimum and maximum thresholds will be adjusted for inflation beginning October 1, 2025.
Read the CBP noticeWhat It Means
MPF in Simple Terms
The Merchandise Processing Fee (MPF) is essentially a service charge that U.S. Customs collects on imported goods. Think of it as an administrative fee that helps pay for the customs officials, computer systems, and infrastructure needed to process your imports. Unlike regular duties that vary by product, this fee applies to almost everything imported into the U.S. at a flat percentage rate of the shipment's value (with minimum and maximum limits).
The MPF is calculated at 0.3464% of the value of imported merchandise, with a minimum fee of $27.75 and a maximum fee of $538.40 per entry (as of 2025). This fee is collected along with duties and taxes on the Entry Summary (CBP Form 7501).
While most imports are subject to MPF, certain exemptions exist, particularly for goods imported under specific free trade agreements like USMCA (formerly NAFTA), which provides complete MPF exemption for qualifying goods from Canada and Mexico.
Historical Timeline
MPF Established
Created through the Consolidated Omnibus Budget Reconciliation Act (COBRA)
NAFTA Exemption
Canada and Mexico goods qualifying under NAFTA became exempt from MPF
Australia FTA Reduction
Australian imports received modified treatment under the US-Australia Free Trade Agreement
Rate Increase
MPF rate increased from 0.21% to 0.3464% with adjusted minimum and maximum fees
Automated Payment
Full integration into the Automated Commercial Environment (ACE) for electronic payment
USMCA Continuation
USMCA maintained the MPF exemption previously established under NAFTA
Latest Fee Adjustment
Most recent adjustment to minimum and maximum thresholds
Real-World Example
Case Study: Optimizing Merchandise Processing Fee Strategies
Background
GlobalSource Inc., a medium-sized electronics components importer, was concerned about their rising import compliance costs. A cost analysis revealed they were paying over $85,000 annually in Merchandise Processing Fees across approximately 300 shipments from various suppliers in Asia and Europe. The company engaged a trade consultant to analyze their import patterns and identify potential MPF reduction strategies.
Initial MPF Situation Analysis
| Import Pattern | Annual Volume | Typical Entry Value | MPF Cost |
|---|---|---|---|
| Small Chinese Shipments | 120 entries | $8,000-$15,000 | $27.75 each (minimum fee) $3,330 total |
| Medium European Shipments | 80 entries | $50,000-$100,000 | $173-$346 each $20,800 total |
| Large Taiwanese Shipments | 40 entries | $200,000-$500,000 | $538.40 each (maximum fee) $21,536 total |
| Regular Japanese Shipments | 60 entries | $80,000-$120,000 | $277-$415 each $20,760 total |
| Total Annual MPF Cost | 300 entries | $66,426 |
MPF Optimization Strategies Implemented
Strategy 1: Entry Consolidation
Combined multiple small Chinese shipments arriving within a 1-week period into single entries
- Reduced Chinese entries from 120 to 48 annually
- Increased average entry value to $25,000-$40,000
- Still below maximum MPF threshold but more efficient
- Required coordination with freight forwarder and broker
Strategy 2: USMCA Sourcing
Identified Mexican supplier alternatives for 20% of Japanese components
- Shifted 12 Japanese shipments to Mexican sourcing
- Qualified goods under USMCA with proper documentation
- Completely eliminated MPF on these entries
- Required supplier qualification and certification process
Strategy 3: Weekly Entry Filing
Implemented weekly entry filings for Taiwanese shipments
- Consolidated Taiwanese entries from 40 to 12 per year
- Each weekly entry now reached maximum MPF of $538.40
- Required ACE account setup and coordination with broker
- Necessitated bond increase to cover higher per-entry values
Strategy 4: FTZ Consideration
Evaluated Foreign Trade Zone for European products
- Determined FTZ not cost-effective for their volume
- Instead focused on improving logistics coordination
- Consolidated European shipments where feasible
- Explored alternate FTA-eligible sourcing for some products
Results
| Strategy | Annual MPF Before | Annual MPF After | Savings |
|---|---|---|---|
| Chinese Entry Consolidation | $3,330 | $1,332 | $1,998 |
| USMCA Sourcing | $4,152 | $0 | $4,152 |
| Weekly Entry Filing | $21,536 | $6,461 | $15,075 |
| European Consolidation | $20,800 | $16,152 | $4,648 |
| Total Savings | $66,426 | $40,553 | $25,873 (39% reduction) |
Key Takeaway: While the Merchandise Processing Fee might seem like a small percentage (0.3464%), it can add up to significant costs for frequent importers. GlobalSource's strategic approach to MPF management delivered nearly $26,000 in annual savings with no impact on their supply chain reliability or product availability. Their experience demonstrates that careful analysis of import patterns, strategic use of free trade agreements, and thoughtful entry management can substantially reduce this import cost component.
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