EXW stands for Ex Works and is one of the 11 Incoterms® rules. It places minimum responsibility on the seller, who makes the goods available at a location, usually the seller’s premises or another named place such as a factory or warehouse. The seller does not need to load goods or clear them for export.
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I'm a seasoned expert in international trade and logistics with a deep understanding of various aspects, including trade terms and agreements. My extensive experience in this field has given me a comprehensive knowledge of the intricacies involved in global commerce.
Now, let's delve into the concept mentioned in the article: EXW, which stands for Ex Works. This term is part of the Incoterms® rules, a set of international trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international transactions.
EXW places minimum responsibility on the seller. In an EXW agreement, the seller makes the goods available at a specified location, typically the seller's premises or another named place like a factory or warehouse. What sets EXW apart is that the seller is not obligated to load the goods or clear them for export. The primary responsibility of the seller is to ensure that the buyer can access the goods at the agreed-upon location.
This Incoterm is often chosen when the buyer has more control over the shipping process and is willing to take on the associated responsibilities and costs. It's crucial for businesses engaged in international trade to understand the implications of using EXW and other Incoterms to ensure smooth and transparent transactions.
If you have any further questions or if there's a specific aspect you'd like to explore within the realm of international trade, feel free to ask.
FAQs
Ex Works (EXW) is a shipping arrangement in which a seller makes a product available at a specific location, but the buyer has to pay the transport costs.
What does the EXW stand for? ›
EXW stands for Ex Works and is one of the 11 Incoterms® rules. It places minimum responsibility on the seller, who makes the goods available at a location, usually the seller's premises or another named place such as a factory or warehouse. The seller does not need to load goods or clear them for export.
Which is better, FOB or EXW? ›
Goods shipped EXW will usually be cheaper FOB since Free on Board would have the supplier bear the costs of transportation, handling, and customs clearance. EXW terms, however, are often riskier for the seller since they are responsible for the goods until they reach their destination.
What is the difference between free carrier and EXW? ›
With EXW, the seller has minimal obligations beyond making the goods available at their premises. In contrast, FCA requires the seller to arrange for transportation and ensure the goods are ready for collection by the carrier.
What is the disadvantage of using EXW? ›
One major disadvantage of EXW to buyers is related to customs clearance. 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.
Who pays for shipping on EXW? ›
Ex Works (EXW) is a shipping arrangement in which a seller makes a product available at a specific location, but the buyer has to pay the transport costs.
What is an example of Ex Works? ›
Example of EX Works
For instance, suppose Business A has 100 generators to export to Business B. A charges $400 per generator plus shipping charges, whereas B offers $300 without shipping costs. If the importer can find a cheaper shipping cost deal than what A is offering, they mostly opt to handle it by themselves.
Is EXW door to door? ›
Ex Works (or EXW for short) is a door-to-door shipping term – and one that has the least risk for sellers. That's because the buyer (you) is responsible for the entire transportation process, from the supplier's warehouse to your UK port. That means you must: Arrange for transport from your supplier's warehouse.
Which incoterm is best for buyer? ›
The Incoterms more favorable to buyers are DAT, DAP, and DDP. With these “D terms,” the buyer is responsible for nothing until the goods arrive in the buyer's country. For small businesses, FCA might represent an attractive compromise.
What does EXW mean on Alibaba? ›
Ex Works (EXW) is an incoterm that indicates that the seller has a responsibility to make sure the buyer can access and pick up the cargo at their place of business. Transportation costs and associated risks are no longer the burden of the seller under the EXW option, and this favors the shipper.
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).
Who is the shipper in EXW? ›
Under EXW terms, the seller must ensure that items being shipped are safely packaged, labeled, and made available for collection at their premises or another agreed place. The buyer takes full responsibility for shipping the goods from their origin to their final destination.
What does EXW price mean in shipping? ›
It is a widely used international shipping term. The ex-works price includes the value of all the materials used and all other costs related to its production, minus any internal taxes, which are, or may be, repaid when the product obtained is exported.
What charges are included in EXW? ›
Under Ex Works (EXW), the buyer pays for all aspects of the shipping process. This includes loading charges, delivery to port, export duties and taxes, origin terminal charges, loading on carriage, carriage charges, destination terminal charges, delivery to destination, and import duty and taxes.
Why not use Ex Works? ›
To put it bluntly, under Ex-works, as the seller you have no control over multiple aspects of your shipment, such as when and who will be collecting it. You also surrender the knowledge of whether it is secure, how it will be transported and where your shipment is and when your customer receives it.
Does EXW include customs clearance? ›
When shipping under EXW Incoterms, the buyer is responsible for all import duty, taxes, & customs clearance. EXW requires the buyer to handle all aspects of the exportation, freight, and importation process. The seller is only responsible for export packaging.
What does EXW stand for in Amazon? ›
EXW – Ex Works
Ex Works is a trade term that means the buyer of the manufactured products is responsible for the shipping process from the moment it leaves the factory to when it arrives at its destination. Responsibilities include transfer fees, shipping cost, insurance, customs, etc.
What is an EXW in the military? ›
(SCW) - Seabee Combat Warfare Specialist. (EXW) - Expeditionary Warfare Specialist.
Does EXW include insurance? ›
Under EXW Incoterm, cargo insurance is not mandatory. It is, however, industry practice for the buyer and seller to each acquire their own insurance to cover their corresponding responsibilities. It is also not uncommon for a buyer or seller to take charge and purchase insurance for the entire shipping process.
What does EXW mean in accounting? ›
EXW means Ex Works and in this case, the seller makes goods available at their premises and the buyer bears the costs and risks associated with the transport of goods to the buyer's place. In this case, the control is transferred right at the seller's premises and the revenue is recognized at that point.
