What does EXW( EX Work) mean in shipping?

Ex Work (EXW) is a trade term where the seller is responsible for making goods available at their premises, while the buyer assumes all cost and risk during transport. As logistics professionals at CSS, we have seen countless businesses grapple with these EXW shipping pitfalls, but we are here to provide clarity and actionable strategies to turn this Incoterms into a strategic advantage.

How does EXW work?

EXW requires a seller to safely package goods, label them appropriately and deliver them to previously agreed upon locations. A commonly used option is the seller must also help the buyer get export licenses or other required paperwork, although the buyer must pay the actual fees for the document.

Once the buyer has the goods, it is up to the buyer to cover any expenses and account for any risks that pertain to the goods. Risk could include:

• Loading the products onto a truck
• Transferring products to a ship or plan
• Dealing with customs officials 
• Unloading products at their destination
• Storing or reselling products

The seller can choose to load the goods on the buyers designated method of transport but is not required to do so. All the seller is required to do is make the product available at a selected location while the buyer pays for transport.

What are the EXW responsibilities for a buyer?

If you are a buyer in an  EX Work arrangement, you will be responsible for:

• Loading: The buyer is responsible for loading the goods onto the transport vehicle at the seller’s premises.
• Transport: The buyer must arrange and pay for transportation from the sellers premises to the final destination.
• Export Procedures: The buyer handles all the export documentation, licenses and customs clearance.
• Insurance: While not mandatory, it is advisable for the buyer to insure the goods against theft or loss during transit.
• Import Procedures: The buyer must take care of import duties, taxes and customs clearance at the destination.
• All Associated Costs: The buyer is responsible for all costs related to loading, transport export and import processes.

What are the EXW responsibilities for a seller?

Seller is an EXW agreement, in contrast to buyers, who have very few responsibilities. Generally, they are responsible for:

• Packing: Packing the goods to be loaded and transported
• Location: Providing a place for the buyer to pick goods up

When to use EXW?

Who arranges Customs Documentation in EX Works?

In EX Works terms, the buyer is responsible for arranging all the documentation, both for import and export. This includes obtaining any necessary export license or permits from the seller’s country, as well as managing import documentation in the destination country.

EXW Shipping Tips And Tricks

• If the seller is going to help load, make sure to include this elsewhere in the sales contract
• When selecting a forwarder, check that they are able to arrange export customs clearance
• If your supplier is handling packing and labeling, make sure they understand the requirements, This is especially crucial if you are shipping Amazon FBA

FAQ`s

Who pays for shipping under EXW?

The buyer for everything after the goods are made available at the seller premises: loading on the collecting vehicle, inland transport to the origin port, export clearance, main carriage, insurance, import clearance duties, destination terminal handling and last mile delivery. The pays only make the goods available at the agreed place and date, properly packed.

Does EXW include export Clearance?

No. Under EXW the buyer is contractually responsible for export clearance in the sellers country. This is often impossible in practice because a foreign buyer usually cannot legally file export clearance without a locally registered exporter of record.

What is the difference between EXW and FOB?

Under EXW the seller’s obligation ends at their premises and the buyer handles loading, inland transport to the port and export clearance. Under FOB the seller’s obligation ends on board the vessel at the named port of shipment, so the seller handles loading at the factory, inland transport to the port, export clearance and terminal handling.

Conclusion

EXW is the Incoterms that puts the whole international shipping burden on the buyer. The EX Works is the goods price only the true landed cost typically runs 60% to 80% higher on a cross border move from Asia to the US. Risk transfers the moment the goods are made available at the sellers premises, not at collection,which is the single biggest first time importer trap.