What Is Ex Works (EXW)?

Ex works (EXW) is a shipping agreement in which a seller makes a product available at a specific location. In other words, the buyer of the product must cover the transport costs. Actually, This best choice for seller but not good choice for buyer. Once sellers hand over goods to the buyers, they are responsible for other risks, such as loading the goods onto trucks, transferring them to a ship or plane, and customs clearance. Ex works (EXW) is one of the 11 Incoterms of standardized international trade terms. This rules are published by the International Chamber of Commerce (ICC).

Key points

Ex works is good choice for the seller but not good for the buyer.

The responsibility of seller is only to safely package the goods and makes available at their premises.

This term places the maximum obligation on the buyer and minimum obligations on the seller.

Once the buyer has the goods, it is up to the buyer to cover any expenses.

The seller must also help the buyer get required paperwork but the buyer must pay the actual fees for the documents.

EXW advantages

Actually, EXW price will be cheaper than FOB price for a product, because the supplier will include the costs of transport to the port and customs clearance to FOB price.

EXW disadvantages

You will get a cheaper product price when buying EXW but your transportation costs will increase, because you alone are responsible for the entire transport from your supplier’s warehouse to your door.