Incoterms EXW: Ex Works
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
- 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
- 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
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.
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