EXW (EX Works)

Incoterms, also known as international commercial terms, are set to eliminate or decrease confusions and conflicts between buyers and sellers in international trade and to facilitate the trade and commerce process globally. Incoterms were created by the International Chamber of Commerce (ICC) in 1936 and since then, they are updated on a regular basis to suit changing trade trends.
EXWFCACPTCIPDAPDPUDDPFASFOBCFRCIF
Free CarrierCarriage Paid ToCarriage Insurance Paid ToDelivered at PlaceDelivered at Place UnloadedDelivered Duty PaidFree Alongside ShipFree On BoardCost & FreightCost, Insurance & Freight
Charges/FeesEx Works
At a named place, the seller transfers the goods to the buyer; the buyer is responsible for all risks.1.) when seller loads goods to buyer’s carrier or 2.) when goods are at the buyer’s disposal & ready for unloading at a named placedwhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen the goods are delivered and unloaded at a named place or agreed point within that placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen goods are alongside the vessel nominated by the buyer at named portwhen goods are on board the vessel nominated by the buyer at named portwhen the goods are on board the vessel nominated by the seller at originwhen the goods are on board the vessel nominated by the seller at origin
Risks Transfer
Commercial InvoiceSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Packaging & QCSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading & DeliveryBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Export Duty & TaxesBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Origin Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerSellerSellerSeller
Cargo InsuranceNegotiableNegotiableNegotiableSellerNegotiableNegotiableNegotiableNegotiableNegotiableNegotiableSeller
Carriage ChargesBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerSellerSeller
Destination Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Delivery to DestinationBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Unloading at DestinationBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyerBuyer
Import Duty & TaxesBuyerBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyer
Incoterms 2020
EXW

Ex Works (EXW) is a term used in international trade to denote when a seller makes a product available at a specified place and the buyer is responsible for the transportation charges.

Ex Works is a contract option that is good for the seller but it’s not appropriate for the buyer, especially novice importers. The seller’s only responsibilities are to properly package the goods, mark them, and deliver them to a previously agreed-upon place, such as the seller’s nearest port. Although the buyer must pay the real fees for the documentation, the seller must help the buyer in obtaining export permits or other relevant paperwork.

Once the buyer gets the goods, it is the buyer’s responsibility to bear any costs and accounts for any risks associated with the goods. Loading the goods into a truck, transporting them by ship or aircraft, dealing with customs authorities, unloading them at their destination, and storing or reselling them are all possible risks. Even if the seller assists the buyer by, for example, putting the goods onto a ship, the buyer is still responsible for any damages that occur during the loading.

In terms of costs and risks, EXW places a minimum obligation on the seller while increasing the buyer’s liabilities.

However, EXW is not suggested for inexperienced buyers who are unfamiliar with the ins and outs of the origin country and are unable to complete the entire import process on their own.

Seller’s Responsibility Under EXW

  • Preparing and placing goods at the buyer’s disposal
  • Packaging and marking
  • Preparing commercial invoice

Buyer’s Responsibility Under EXW

  • Goods payment
  • Duties and taxes payment
  • Loading cargo in seller’s place
  • Preparing export licenses and customs formalities
  • Preparing import licenses and customs formalities
  • Transportation of goods in the country of origin and destination country
  • Customs handling fees in the country of origin and destination country
  • Origin and destination charges
  • International freight

Cargo Insurance in EXW

Cargo insurance is not required under the EXW Incoterm. However, it is standard practice in the industry for the buyer and seller to both get their own insurance to meet their respective responsibilities.

It’s also uncommon for a buyer or seller to take responsibility for the shipment procedure and acquire insurance for the entire trip.

In your sales contract, make sure to include the insurance terms and conditions.

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