EXW - Ex Works

What is the EXW Incoterm (Ex Works)

The EXW Incoterm is one of those that puts more responsibility on the part of the buyer than the seller. Hence, it’s recommended for buyers who are highly experienced with the shipping and import processes.

Under the EXW Incoterm, the seller’s responsibility is limited to preparing the goods for collection at their premises. The buyer picks up the goods and arranges the entirety of the transport, export, and import requirements.

While the EXW Incoterm can be used for any mode of transport, it allows the importer to take full control of the ocean freight process.

Insurance is not required under the EXW Incoterm, but many buyers and sellers who make use of it opt to obtain insurance.

The Seller’s Obligations Under the EXW Incoterm

• Checking, packaging, and marking
• Prepare the goods for the buyer to pick up
• Bear all risks of loss of or damage to the goods until they have been picked up by the buyer
• At the buyer’s request, may assist in obtaining the documents and information needed for export, transit, and import requirements
• No obligation to make a contract of carriage
• No obligation to obtain insurance.

The Buyer’s Obligations Under the EXW Incoterm

• Pay for the foods
• Pick up the goods at the seller’s premises
• Bear all risks of loss of or damage to the goods from the time they have been picked up
• Contract of carriage
• Export, transit, and import clearance
• Customs handling fees at origin and destination
• Origin and destination charges
• Duties and taxes
• No obligation to obtain insurance.

What Does the Seller Pay for Under the EXW Incoterm?

The seller’s expenses under the EXW Incoterm are limited to the costs relating to the goods until the buyer picks them up. It is the buyer who bears all other expenses involved in the shipment.

What Does the Buyer Pay for Under the EXW Incoterm?

• All costs relating to the goods from the time they have been picked up
• Duties and taxes
• Customs formalities

Should Buyers Choose the EXW Incoterm?

The EXW Incoterm is highly convenient for sellers who have no experience with international shipping and logistics. However, it can be inconvenient for buyers because most of the responsibilities involved are put in their hands.

In cases where the buyer is not in the country of export or does not understand the industry, they will have trouble arranging loading services and international freight. However, they bear all risks once the goods have been picked up from the seller’s premises.

Buyers who want to avoid complications should use the FCA Incoterm instead. If you are unsure which Incoterm to use, download our ebook on how to choose the best Incoterm or get in touch with our export and import industry experts.