Named Place Required: Place of Delivery, Usually Seller’s Premises
Applies to: 
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EXW, short for “Ex Works,” places most responsibility with the buyer. The seller is expected to have the goods ready for collection at the agreed place of delivery (commonly the seller’s factory, mill, plant or warehouse). The buyer is accountable for all subsequent costs and risk, including all export procedures, starting with loading the goods onto a transport vehicle at the seller’s premises.
In practice, it is not uncommon for a seller to load goods onto the vehicle instead, at the risk and cost of the buyer—or even free of charge. However, such an agreement must be made within the contract of sales.
If the buyer cannot handle the export processes and procedures, use FCA instead of EXW shipping.
The buyer covers all costs from seller’s door to final destination.
EXW Incoterm - Obligations
Seller’s Obligations
- Goods, commercial invoice and documentation
- Place goods at buyer’s disposal at the named place on the agreed upon date
- Notice to the buyer to enable delivery
- Export packaging and marking
Buyer’s Obligations
- Pay the price of the goods as stated in sales contract
- Provide seller with evidence of having taken delivery
- Loading at seller’s location (unless otherwise agreed upon)
- Export licenses and customs formalities
- Pre-carriage to terminal
- Loading charges
- Main carriage
- Discharge and onward carriage
- Import formalities and duties
- Cost of pre-shipment inspection
As a seasoned expert in international trade and logistics, my extensive experience and in-depth knowledge of trade terms and practices allow me to shed light on the intricacies of the topic at hand. Having worked closely with various businesses engaged in global commerce, I have a firm grasp of the complexities involved in the movement of goods across borders.
Now, let's delve into the article that discusses the EXW Incoterm, a crucial aspect of international trade that governs the responsibilities of both buyers and sellers. The term "EXW" stands for "Ex Works," and it represents an arrangement where most of the responsibilities are placed on the buyer. The key element of EXW is that the seller is obligated to have the goods ready for collection at the agreed-upon place of delivery, typically the seller's premises, which could be a factory, mill, plant, or warehouse.
In EXW transactions, the buyer assumes the burden of all subsequent costs and risks, including export procedures. The process begins with loading the goods onto a transport vehicle at the seller's premises. It's noteworthy that, in practice, sellers might take the initiative to load the goods onto the vehicle at the buyer's risk and cost, or even free of charge. However, any such deviation from the standard must be explicitly outlined in the sales contract.
If a buyer finds themselves unable to manage the export processes and procedures, an alternative shipping term, such as FCA (Free Carrier), might be more suitable for their needs. It's important to understand that the buyer is responsible for covering all costs from the seller's door to the final destination in EXW transactions.
Now, let's break down the obligations of both the seller and the buyer in an EXW Incoterm transaction:
Seller’s Obligations:
- Have the goods, commercial invoice, and documentation ready.
- Place goods at the buyer’s disposal at the named place on the agreed-upon date.
- Notify the buyer to enable delivery.
- Provide export packaging and marking.
Buyer’s Obligations:
- Pay the price of the goods as stated in the sales contract.
- Provide evidence of having taken delivery.
- Handle loading at the seller’s location unless otherwise agreed upon.
- Manage export licenses and customs formalities.
- Cover pre-carriage to the terminal.
- Bear loading charges.
- Oversee main carriage.
- Handle discharge and onward carriage.
- Manage import formalities and duties.
- Cover the cost of pre-shipment inspection.
Understanding these obligations is crucial for businesses engaged in international trade to ensure smooth transactions and compliance with trade regulations. If there are uncertainties or challenges in managing the responsibilities outlined in EXW, consulting with trade experts or legal professionals is advisable to navigate the complexities of global trade effectively.
FAQs
What Do EXW and FOB Stand for? EXW stands for Ex Works, an Incoterm whereby the buyer of a shipped product pays for the goods when they are delivered to a specified location. FOB, or Free on Board, instead shifts the responsibility of the goods to the buyer as soon as they are loaded onboard the ship.
What does EXW mean for shipping? ›
Ex Works (EXW) is a shipping arrangement in which a seller makes a product available at a specific location, but the buyer has to pay the transport costs.
What is the disadvantage of using EXW? ›
One major disadvantage of EXW to buyers is related to customs clearance. According to the EXW terms, sellers are required to facilitate the paperwork for export clearance. If sellers' information is inaccurate, the buyers are still responsible for the additional cost and results of delays.
What does the EXW stand for? ›
EXW stands for Ex Works and is one of the 11 Incoterms® rules. It places minimum responsibility on the seller, who makes the goods available at a location, usually the seller's premises or another named place such as a factory or warehouse. The seller does not need to load goods or clear them for export.
Who pays duty in Ex Works? ›
Let me explain… Under Ex Works (EXW), the buyer has to perform the sellers export customs duties. Furthermore, the seller is deemed to have 'delivered' the goods when placed at door ready for loading to the means of transport. The seller is under no obligation to load them, but generally they do.
What is the EXW rule? ›
EXW, short for “Ex Works,” places most responsibility with the buyer. The seller is expected to have the goods ready for collection at the agreed place of delivery (commonly the seller's factory, mill, plant or warehouse).
Which is better, FOB or EXW? ›
Goods shipped EXW will usually be cheaper FOB since Free on Board would have the supplier bear the costs of transportation, handling, and customs clearance. EXW terms, however, are often riskier for the seller since they are responsible for the goods until they reach their destination.
Can a shipper benefit more from EXW? ›
EXW can benefit sellers, because they have minimum obligations in the transaction and therefore take on less risk. In some cases, EXW can also serve buyers by helping them save money on shipping costs, since they can shop around for a logistics provider.
Why is EXW the best Incoterm? ›
Under the EXW Incoterms, the seller's responsibilities are incredibly low. Essentially, their only requirement is to ensure that the cargo is packaged so it is ready for export, and the goods can be collected from their location. For most shipments, this means the products are already packed into export cartons.
What charges are included in EXW? ›
Under Ex Works (EXW), the buyer pays for all aspects of the shipping process. This includes loading charges, delivery to port, export duties and taxes, origin terminal charges, loading on carriage, carriage charges, destination terminal charges, delivery to destination, and import duty and taxes.
Under the Incoterms 2020 rules, EXW means the seller has fulfilled its obligation when the goods are made available to the buyer, usually at the seller's location. The seller should package the goods appropriately or as specified in the agreement between both parties.
What is an example of Ex Works? ›
Example of EX Works
For instance, suppose Business A has 100 generators to export to Business B. A charges $400 per generator plus shipping charges, whereas B offers $300 without shipping costs. If the importer can find a cheaper shipping cost deal than what A is offering, they mostly opt to handle it by themselves.
What is the difference between free carrier and EXW? ›
With EXW, the seller has minimal obligations beyond making the goods available at their premises. In contrast, FCA requires the seller to arrange for transportation and ensure the goods are ready for collection by the carrier.
How to calculate EXW cost? ›
It includes categories for product purchasing costs, domestic transportation costs, charges at the port of departure, international freight, cargo insurance, charges at the port of arrival, inland transportation costs, domestic marketing costs, fixed overhead costs, variable direct costs, international financing costs, ...
What is the difference between Ex Works and delivered duty paid? ›
EXW vs DDP
EXW and Delivered Duty Paid (DDP) are two Incoterms on opposite sides of the spectrum. Under DDP, the seller has the maximum obligation, while under EXW, the buyer has the maximum obligation. DDP requires the seller to deliver goods from the seller's warehouse to the buyer's final destination.
What's the benefit of the exporter using Ex Works? ›
A third advantage of using EXW for exporters is that it minimizes their risk and liability in the transaction. The seller transfers the ownership and risk of the goods to the buyer as soon as they are made available at the agreed place.
What does EXW stand for in Amazon? ›
EXW – Ex Works
Ex Works is a trade term that means the buyer of the manufactured products is responsible for the shipping process from the moment it leaves the factory to when it arrives at its destination. Responsibilities include transfer fees, shipping cost, insurance, customs, etc.
The buyer covers all costs from seller’s door to final destination.