Incoterms 2020

EXW (Ex Works)
Complete Guide

The minimum obligation for sellers - buyer handles everything from pickup at factory to final destination.

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What is EXW?

Understanding the minimum obligation Incoterm for international shipping

Ex Works (EXW)

EXW represents the minimum obligation for the seller. According to Incoterms 2020, EXW means the seller delivers when they place the goods at the disposal of the buyer at the seller's premises or another named place.

⚠️ Important: Under EXW, the seller is ONLY responsible for making the goods available at their premises. The buyer bears ALL costs and risks involved in taking the goods from the seller's premises to the final destination.

The buyer loads the goods and clears them for export, including all export formalities, duties, taxes, and transportation costs.

EXW Diagram

Responsibilities Breakdown

Buyer bears almost all responsibilities under EXW

🏭 Seller Responsibilities

  • ✓ Produce/pack goods
  • ✓ Make goods available at premises
  • ✓ Provide commercial invoice
  • ✗ NO loading on buyer's vehicle
  • ✗ NO export clearance
  • ✗ NO export duties/taxes
  • ✗ NO transportation costs
  • ✗ NO insurance during transit

📦 Buyer Responsibilities

  • ✓ Pickup goods at seller's premises
  • ✓ Loading onto vehicle
  • ✓ Export customs clearance
  • ✓ Export duties & taxes
  • ✓ All transportation costs
  • ✓ Insurance during transit
  • ✓ Import clearance & duties
  • ✓ Final delivery

EXW Shipping Process

Buyer manages everything from factory pickup to final destination

1
🏭

Goods Ready

Seller makes goods available

Buyer
2
🚛

Pickup & Loading

Buyer loads at factory

Buyer
3
📋

Export Clearance

Buyer handles export

Buyer
4
🚢

Transit

Buyer arranges freight

Buyer
5
📋

Import Clearance

Buyer handles import

Buyer
6
🏁

Final Delivery

Buyer receives goods

Buyer

⚠️ Important Warning

EXW should NOT be used for international shipments when:

  • The buyer cannot directly or indirectly obtain export clearance
  • The buyer is unfamiliar with export procedures in the seller's country
  • The buyer wants to minimize logistics coordination
  • The buyer lacks local representation or agents in the seller's country

Recommendation: Consider FCA (Free Carrier) or FOB instead for better risk allocation and logistics management.

EXW vs Other Incoterms(For Seller)

Compare EXW with FCA, FOB, CIF, and DDP

Cost / Risk Item EXW FCA FOB CIF DDP
Loading at factory ✗ ✓ ✓ ✓ ✓
Export clearance ✗ ✓ ✓ ✓ ✓
Transport to port ✗ ✓ ✓ ✓ ✓
Ocean/air freight ✗ ✗ ✗ ✓ ✓
Insurance ✗ ✗ ✗ ✓ ✓
Import clearance ✗ ✗ ✗ ✗ ✓
Delivery to door ✗ ✗ ✗ ✗ ✓

Advantages of EXW

Why some buyers choose EXW terms

💰

Maximum Price Control

Buyer can see the exact factory price without any shipping markups. Complete transparency in product costing.

🎯

Full Logistics Control

Buyer controls every aspect of shipping from carrier selection to routing and scheduling.

📦

Consolidation Flexibility

Ideal for buyers who consolidate shipments from multiple suppliers before export.

⚠️

Maximum Seller Benefit

Sellers have minimum responsibility and risk. No obligation beyond making goods available.

Important Considerations

Things to consider before choosing EXW

🌍

Local Knowledge Required

Buyer must have good understanding of seller's country export procedures and regulations.

📋

Complex Export Clearance

Buyer handles export clearance which can be complex in certain countries with strict export controls.

🚛

Loading Responsibility

Buyer is responsible for loading goods at seller's premises. Ensure vehicle access and loading equipment.

💳

Payment Risks

Seller receives payment before releasing goods. Buyer must ensure payment security and goods inspection.

Frequently Asked Questions

Common questions about EXW shipping

What's the difference between EXW and FCA? ▼

EXW (Ex Works): Seller only makes goods available at their premises. Buyer handles loading, export clearance, and all transportation.

FCA (Free Carrier): Seller delivers goods to the carrier nominated by buyer at seller's premises. Seller is responsible for loading.

Key Difference: Under FCA, seller loads goods onto buyer's vehicle. Under EXW, buyer loads.

Who handles export clearance under EXW? ▼

Under EXW, the buyer handles export clearance. This includes all export documentation, licenses, and export duties or taxes.

This can be challenging for buyers unfamiliar with the seller's country export procedures.

When should I use EXW? ▼

Choose EXW when:

  • You have local presence/agents in the seller's country
  • You want maximum control over logistics
  • You're consolidating from multiple suppliers
  • You have established export capabilities
  • You want complete transparency in factory pricing
What are the risks of EXW? ▼

Key risks include:

  • Loading damage at seller's premises
  • Export clearance delays or complications
  • Coordination challenges with multiple suppliers
  • Unexpected export duties or taxes
  • Limited recourse if goods are damaged during loading
What documents does seller provide under EXW? ▼

Under EXW, seller only needs to provide:

  • Commercial Invoice
  • Packing List
  • Proof of goods availability

All export and transport documents are buyer's responsibility.

Who is EXW Best For?

🏢 Large Importers 🔄 Freight Forwarders 🌐 Sourcing Companies 📦 Consolidators 💼 Experienced Importers 🏭 Local Buyers Abroad

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