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When using EXW Incoterm or Ex Works, the seller is obliged to prepare the goods for collection at his premises (office, warehouse, factory, etc.) to be collected by the buyer. In terms of costs and risks, this incoterm requires a minimal obligation for the seller and more responsibilities for the buyer.
The EXW Incoterm is versatile in that it can be used regardless of the mode of transport chosen. However, the EXW Incoterm should not be used if the buyer cannot directly or indirectly complete the import procedures. Under such a circumstance, the FCA Incoterm should be used instead.
Delivery of goods and documents required
Packaging and wrapping
Payment of goods
Inland transportation in the country of origin
Customs at origin
Customs on arrival
Inland transportation at the destination country
Payment of fees
The EXW Incoterm may be the most comfortable choice for exporters with little experience in logistics and international maritime shipping. Given that the only obligation the seller has is to ensure that the goods have been prepared properly for pickup, there is little consequence for the exporter.
But despite the low risk, the EXW Incoterm may not be the most competitive option for the exporter. If you to choose to only deal with the EXW Incoterm as an exporter, a buyer may decide to choose another supplier with a more attractive and simpler offer.
Under the EXW Incoterm, the importer has nearly full control over the ocean freight shipment and is extremely competitive.
If you’re a seasoned importer, you can negotiate with your carrier and/or freight forwarder to get the best prices and shipping conditions for your logistical needs. With this control, you also have more negotiating power over your seller to try and get him to offer a more competitive rate.
Our advice is for you to operate under the EXW Incoterm only if you have experience in shipping. It is also important to be familiar with the ins and outs of the country of origin, ensuring that it’s safe and/or at least that your has presence in that country.
Still unsure if the EXW Incoterm is the right incoterm for your ocean freight shipment? Do give our article on how to choose a safe and competitive incoterm a read. Or if you prefer, you may contact us. Our import and export consultants will be glad to help you out.