US vs offshore CNC machining cost: compare landed cost, not quotes
Cost · Updated November 8, 2026
An offshore quote that is 40 percent below a US quote looks like an easy decision. It rarely is. The price on the quote is only one line of what the part costs you by the time it is on your shelf and in your product.
The landed cost formula
Landed cost per part is the sum of:
- Piece price from the quote
- Tooling and setup, spread over the expected volume
- Freight from the shop to your dock
- Duties and brokerage
- Inventory carrying cost, usually figured as a yearly percentage of the stock you hold
- Quality cost: inspection, rework, scrap and replacement shipments
- Travel and management time for audits and problem solving
The first line is usually lower offshore. Lines 3 to 7 are usually lower in the US.
Inventory is the line people forget
An offshore supply chain with 8 to 12 weeks between order and delivery forces you to hold more stock. If you hold three months of parts instead of three weeks, you pay to finance and store that stock, and you risk it becoming obsolete when the design changes.
A worked example
Assume a stainless part with a yearly volume of 2,000 pieces.
| Item | Offshore | US shop |
|---|---|---|
| Piece price | Lower | Higher |
| Freight and duties per part | Added | Small |
| Stock held | About 3 months | About 3 weeks |
| Rejected lot risk | Higher impact, slow to replace | Lower impact, fast to replace |
| Engineering change | Weeks | Days |
The exact numbers depend on your part. The pattern holds: the more often the design changes and the lower the volume, the better a US shop looks.
When offshore still wins
High volume, stable designs with low weight and simple tolerances often stay cheaper offshore even after landed cost. That is fine. The goal is to put each part where its total cost is lowest.
How to run the comparison
- Ask both suppliers to quote the same drawing, quantity and lot size.
- Add freight, duties and brokerage from real recent shipments.
- Use your actual inventory levels, not ideal ones.
- Add a quality allowance based on your history with each supplier.
- Recalculate when volume or design changes.
Questions
Is CNC machining cheaper overseas?
The piece price often is. Once freight, duties, inventory and quality costs are added, the gap narrows and on some parts disappears.
Which parts are best to keep in the US?
Low volume, high mix parts, parts with frequent design changes, heavy parts and parts with domestic content requirements.
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