What are the benefits and risks of using EXW, FCA, and FAS Incoterms for exporters? (2024)

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EXW can be very unfavourable to the buyers in some cases e.g. As is known, according to the EXW terms, sellers are required to facilitate the paperwork for export clearance. If sellers’ information is inaccurate, the buyers are still responsible for the additional cost and results of delays. However, EXW can also bring benefits, for example, since the shipping costs and responsibilities are on the buyers’ side, this may allow them to control the entire shipping process to ensure the products are safe. This shipping method is favourable to subsequent local transportation. It may allow the buyers to better forecast the costs and avoid sellers charging a higher shipping fee

### EXW (Ex Works): What Does It Mean?**EXW (Ex Works)** is a trade term where the seller makes goods available at their premises, and the buyer assumes all risks and costs from there. Here’s a quick breakdown:- **Seller's Responsibility:** Minimal; the seller's only obligation is to make the goods available at their location (factory, warehouse, etc.).- **Buyer's Responsibility:** The buyer handles all aspects of transport, including loading, shipping, customs clearance, and delivery to the final destination.- **Cost and Risk:** The buyer assumes all costs and risks once the goods are made available by the seller.At AetherWays, we provide expert guidance on EXW terms to ensure smooth and cost-effective logistics for your business.

Ex works should give the highest protection to the shipper. Because cargo is accepted as soon as loaded. If payment is also done same moment, the exporter has what he wanted and is paid what he asked for. Later payment includes weaker position of the exporter.

There may be negative impacts for sellers EXW is insisted. International buyers might not be able to handle the export formalities within the country of the seller for any reason (most commonly is they're not setup as a business locally). Sellers may consider competitors who are willing to take over export formalities as a threat. The seller should note as they're operating within the country and adhering to local regulations, they would have the need and capabilities to handle export formalities and build rapport with the local authorities. Negotiations regarding clearance arrangements could also be discussed and put into the sale contract to still have customer taking the clearance arrangements under the seller's entity.

please do not forget that EXW is very dangerous regarding VAT. normally the exporter should invoice the VAT because there is no control whether goods leave the EU..

Under FCA, there’s a new provision allowing the buyer to instruct the carrier to issue a transport document to the seller without the onboard notation, provided they have their own means of transportation.

In my experience FAS could be risky for the Seller, in some cases unexpected delays occur in arrival of the nomitaed vessel, however, the seller would still wait for the vessel to dock so that their obligations have been eventually completed. Plus, they will still need to assist the buyer in acquiring transport documents.I think it can be used where goods are deliverable straight to a loading dock but not advisable for liner services that use small ports.

An option that increases slightly the risk for the exporter. But at least the control over his cargo is in the exporters hand. But if not paid as soon as the cargo is delivered to the port, the exporter depends on the importer about what and how cargo arrived before being paid.