Incoterms 2020

EXW Incoterm (Ex Works) – Meaning, Risk & Costs

EXW (Ex Works) under Incoterms 2020: where risk transfers, who pays for carriage, and seller and buyer obligations. Works with any mode of transport.

Rule: EXW – Ex Works (named place of delivery)
Transport mode: Any Mode of Transport
Insurance required: No
Export clearance: Buyer
Import clearance: Buyer
Main carriage: Buyer

Ex Works (EXW) represents the minimum obligation for the seller. The seller makes the goods available at their premises or another named place (works, factory, warehouse, etc.). The buyer bears all costs and risks from taking the goods from the seller's premises to the desired destination.

The seller is not required to load the goods on any collecting vehicle, nor clear the goods for export. If the seller loads the goods, they do so at the buyer's risk and cost.

EXW is often used for initial quotations when negotiating terms, or when the buyer has strong logistics capabilities in the seller's country.

When risk transfers under EXW

When goods are placed at buyer's disposal at the named place

When costs transfer under EXW

At seller's premises when goods are made available

Seller obligations under EXW

Make goods available at named place (factory, warehouse)
Provide commercial invoice and documentation
Package goods appropriately for transport
Assist buyer with export formalities if requested (at buyer's cost)

Buyer obligations under EXW

Pay for goods as per contract
Arrange and pay for all transport
Handle export and import customs clearance
Bear all risks from seller's premises
Obtain export and import licenses
Pay all duties, taxes, and charges

Who is responsible for what under EXW

Export customs clearance: Buyer
Import customs clearance: Buyer
Loading: Buyer
Main carriage: Buyer
Unloading: Buyer
Delivery to destination: Buyer

Common uses of EXW

Domestic sales
When buyer has strong logistics in seller's country
Initial price quotations
Sales to trading companies

EXW is best for

Experienced importers with local presence
Buyers who want maximum control
When buyer can get better freight rates

Risks to watch with EXW

Buyer handles export customs (may lack expertise)
Seller has no control after goods leave premises
Potential delays at export customs

Frequently asked questions

What does EXW mean in shipping?

EXW stands for Ex Works. Ex Works (EXW) represents the minimum obligation for the seller.

When does risk transfer under EXW?

When goods are placed at buyer's disposal at the named place

Who pays for main carriage under EXW?

The buyer pays for main carriage under EXW.

Who handles customs clearance under EXW?

Under EXW, the buyer handles export clearance and the buyer handles import clearance.

Is insurance required under EXW?

No. EXW does not require either party to buy insurance, though either may choose to arrange it.