EXW – Ex Works (named place)

The meaning of it is that the recipient takes the goods from the premises of the supplier, it can be a store, warehouse, etc. The supplier does not bear any obligations, except for the shipment of goods. All costs are borne by the recipient. EXW is not intended for the transport of goods to the EU. EXW is not used if the recipient is not able to export independently. EXW is for domestic traffic. EXW condition is used to transport goods by any means of transport

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.

Who covers the logistics charges?

Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the sell

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

Bottom Line

For a buyer, entering into an Ex Works shipping agreement can be risky and time-consuming, adding to the workload. However, if the buyer has adequate knowledge and suitable organization and connections, they can save money with the Ex Works arrangement. For the seller, the Ex Works agreement can be a good choice, as it saves the seller from the majority of the risk and responsibility. The only negative to this is that the seller will miss out on their commission from the shipping company.