Incoterms EXW

 

Named Place Required:Place of Delivery, Usually Seller’s Premises

The buyer covers all costs from seller’s door to final destination.

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.

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

The Incoterms® 2020 rule known as Ex Works (EXW) is used to define the delivery of products by the seller at their place of business, which is often at their factory, offices, or warehouse. The buyer is responsible for the balance of the cargo; the seller is not required to load the products onto a truck or ship at that point (e.g. overseas shipment and customs duty). Because the seller does not have to care about the freight once it leaves their premises, EXW is more advantageous to them. But it's important to understand that even though the goods are still in the seller's possession and under his or her physical control, the buyer bears the risk from the moment the seller informs the buyer that the goods for the contract have been identified and set aside and that the delivery has been made. In addition, the seller is not responsible for loading the products into the buyer's collecting vehicle. How does this actually work in practice? Will the seller let the buyer's transport contractor to bring their own labor force and forklift and to rampage through the seller's warehouse? What effects may this have on insurance, job safety, and other things?More issues arise if the products are exported. The buyer is responsible for exporting the items, and in the majority of nations, only exporting is permitted by entities that are registered there.
Potential VAT/GST difficulties should also be considered because, without export proof, the seller is required to collect this tax because the transaction would be regarded as a domestic one.
Utilizing EXW as it is stated in Incoterms 2020 is almost impossible.  

Any excerpts quoted from the Incoterms® 2020 rules are the copyright of the International Chamber of

Commerce. Source: ICC website. The full text of the 2020 edition of the Incoterms rules is available at
https://2go. iccwbo.org/. The word “Incoterms” is a registered trademark of the International Chamber of Commerce.