Ex Works (EXW) Incoterm: Shipping Terms (2024)

EXW Incoterm: Understand all about the Ex Works shipping terms

The Ex Works Incoterm is part of 11 shipping terms defined by the International Chamber of Commerce (ICC) to lớn ease international trade. When shipping under the EXW Incoterm, the seller bears only the responsibility of making the goods available at a chosen location, and the buyer takes care of the rest. This article will explain more about how the Ex Works Incoterm works for senders and buyers, including information about customs clearance and insurance.

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What bởi you want to lớn know?

The EXW Incoterm is one of the shipping terms that establishes the least responsibilities for the seller. Under EXW trade terms, the seller has to lớn pack and make the goods available for the buyer at the agreed location, which can be the seller’s premises, a port, or a warehouse. In turn, the buyer is responsible for arranging and paying for the goods transport, customs fees, and loading and unloading of the cargo.

Since the buyer is responsible for arranging the transport, the final price does not include shipping fees when using EX Works for exporting and importing.

The EXW Incoterm can be used for all modes of transport, but it is not advisable for buyers with little logistics experience because most of the risk when shipping under the EXW Incoterm is borne by the buyer. If you don’t have the required logistics knowledge, tương tác us, and we will help you ship your goods wherever you need them.

See below the diagram that explains the responsibilities of the seller and the buyer when shipping under EXW Incoterm.

Risk transfer point on the EXW Incoterm

When shipping under EXW terms, the risk transfers from the seller to lớn the buyer when the buyer makes the goods available at the agreed place of delivery. Even though it is not a rule, it makes things smoother if the delivery location is decided upfront and included in the contract.

The seller is not responsible for loading the goods in the transport vehicle. However, in practical terms, they can be paid to lớn bởi sánh if they agree on the contract beforehand. It is important to lớn make it clear that even if the seller loads the goods, the buyer still holds the risks during loading because the risk transfer point is the point where they make the goods available.

SHIPPING COSTS

Ex Works Price: charges for seller and buyer under EXW Incoterm

As mentioned, the Ex Works price does not include the shipping costs. The price you see in the invoice refers to lớn costs related to lớn purchasing the goods, packaging, and making them available at the delivery location.

The seller may also help get any documentation required for export, but the buyer bears the fees related to lớn customs clearance.

EXW shipping: costs of the seller

Packaging and labelling the goods
Making the goods available for inspection
Deliver the goods to lớn the designated location

EXW shipping: costs of the buyer

Export fees, customs clearance and documentation
Loading of the goods onto a vessel or vehicle at the delivery location
Terminal charges and all freight transportation fees
Clearing the goods for import, import fees and documentation
Destination terminal charges and the unloading of the goods
Last-mile deliveries and storage

Example of EXW shipping term

Suppose an Irish company (the seller), headquartered in Dublin, sells 100,000 units of merchandise to lớn a US company (the buyer) under EXW freight terms. The agreed Ex Works delivery location is the seller’s hub at the port of origin in Cork, Ireland.

The Irish company (seller) pays for packaging the goods and for the inland transport from their base to lớn the designated port in Cork.
The US company (buyer) pays to lớn load the goods into their or the carrier’s vessels, clears the goods for export, and pays for the export customs clearance at the Irish port.
The US company (buyer) must arrange all transport details and cover all costs related to lớn freight shipping. They can choose the carrier of their choice.
Once the cargo reaches the destination port in the US, the buyer pays for import clearance and fees, for unloading the goods from the vessel, and all subsequent US transport.

See other Incoterms for international transport

Are you looking for the right Incoterm for your cargo? Check other Incoterms to lớn ensure you select the best-matching terms for your needs.

EXW TRADE TERMS

EXW – Ex Works customs clearance

When using EXW for import and export, buyers will be responsible for all customs clearance procedures, fees and taxes. This means that the buyer will have to lớn khuyến mãi with the local trade authorities in the export country too.

The seller may help with the documentation for export with the local authorities, but if there is any additional cost related to lớn incorrect or lacking information, the buyer is the one that bears the costs following the EXW Incoterm specifications.

It is important to lớn note that it is not always possible for the buyer to lớn be fully responsible for the export procedures according to lớn local jurisdictions. For instance, in the EU, a non-resident individual or business cannot bởi the export declaration documents himself. In this case, it is better to lớn ship under another Incoterm, such as the FCA, where the seller is responsible for clearing the goods for export.

INSURANCE

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Shipping insurance under EXW Incoterm

According to lớn the EXW shipping specifications, neither the seller nor the buyer is required to lớn make an insurance contract. However, since the buyer bears the risk during most of the transaction, they are advised to lớn purchase insurance for their goods.

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Ex Works meaning in shipping: FAQ

What are the advantages of using the Ex Works Incoterm?

For the seller, the EXW Incoterm requires the least effort because their only responsibility is to lớn make the goods available at the designated location. The designated location can even be on the seller’s facilities, which requires sellers to lớn only pack and label the goods correctly.

For the buyer, the biggest advantage is that EXW trade terms allow them to lớn choose their own shipping method and carrier, which gives room for negotiation on the transport cost. Shipping under the EXW Incoterm is often the cheapest option available, which can be a great advantage for the buyer if they have the resources to lớn arrange export clearance and freight transport in the export country.

In which situations is the EXW Incoterm mostly used?

The Ex Works Incoterm is often used for:

Domestic transactions, where the buyer does not have to lớn worry about export and import licenses.
Consolidation, when the buyer gathers goods from different suppliers to lớn transport as one cargo.
When the seller is unable to lớn export the desired goods.

For other situations, there are usually other Incoterms that are more advantageous such as FCA or FOB.

Who pays for freight transport under the EXW Incoterm?

The buyer is responsible for paying freight transport costs when shipping under EXW terms.

This often means that the buyer can negotiate better rates if they have good connections for arranging transport. For example, the seller may charge € đôi mươi,000 for the goods and € 10,000 for transport. If the buyer can arrange the freight shipping for € 6,000, shipping under EXW may be a good khuyến mãi for them.

Who chooses the designated location in EXW transport?

Under Ex Works shipping terms, the buyer and the seller have to lớn agree upon the designated location for delivery, which can be the seller’s premises, a warehouse, a hub or a convenient port in the country of origin. The designated location is not regulated by the Ex Works Incoterm and has to lớn be decided when drafting the contract.

What does EXW price with Alibaba mean?

Alibaba, one of the most important online retailers, often uses Ex Works prices for their sales. This means that the Alibaba seller, usually located in mainland Trung Quốc will make their goods available at a designated location. Usually, the seller will already have a location chosen for convenience. As a buyer purchasing goods with EXW Alibaba prices, you will have to lớn pay for clearing the goods for export and import, loading, unloading and shipping fees.

Who is responsible for loading the cargo when using the EXW Incoterm?

The buyer is responsible for loading the goods on the selected vessel. Although with EXW trade terms, the seller can offer the load the goods on the vessel, they are not obligated to lớn. If a buyer needs their cargo loaded on the vessel, they can choose FOB or Free on Board.

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What is included in an EXW invoice?

If you are issued an EXW invoice, this only includes the price of the merchandise, which will be available at the agreed delivery location. This means you (the buyer) will have to lớn cover export charges at the country of origin, taxes and licenses, as well as all freight costs, including the loading and unloading of the goods.

A logistics hub lượt thích Eurosender can help you find the freight forwarder with the capabilities to lớn transport your cargo and help with export and import paperwork, making it easier to lớn ship under the Ex Works Incoterm even if you are a beginner.