EXW (Ex Works) is a trade term from international commercial law specifying that the seller of goods is responsible for making the goods available at the seller’s premises (works, factory, warehouse, etc.
) to the buyer and that the buyer bears the cost for transport from that location. In other words, the seller is not responsible for the goods from this point onwards.
The Ex Works term places the maximum risk and responsibility on the buyer and minimum risk and responsibility on the seller. It is used frequently in international and domestic trade, but in particular it is relevant to international trade due to the associated costs and risks involved.
When using Ex Works terms, buyers need to ensure that they are able to arrange the necessary insurance and transport to ensure the safe movement of goods.
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What is better EXW or FOB?
Both EXW (Ex Works) and FOB (Free On Board) are Incoterms (International Commercial Terms) used for defining the payment for delivering goods from the seller to the buyer. EXW is the simplest form of delivery where the seller’s responsibility ends at the factory door.
This means that the buyer has to take possession of the goods from the factory, take responsibility for all transport and related costs, pay customs duties and obtain the necessary paperwork from the local customs.
On the other hand, FOB is more often used for international shipping. Under FOB, the responsibility of the goods remains with the seller until the goods are loaded on the nominated vessel at the specified port of loading.
The buyer assumes ownership and responsibility for the goods when they are placed on board.
The major difference between EXW and FOB is the risk transfer point. With EXW, the buyer pays all transport costs and takes on the risks of transport. With FOB, the responsibility and costs of the transport to the port is the seller’s, and the buyer assumes the responsibility and the costs of the transport from the port onwards.
This effectively reduces the risk posed to the seller due to transport, as they only need to pay transport up to the named port.
Which of these terms is better depends on individual circumstances and the trading experience of the two parties. For buyers, FOB is often the better option as it reduces their overall costs for transport and gives them more control of their cargo.
For sellers, EXW is often better as it transfers the risk to the buyer from the point of collection of goods from the factory and eliminates the need for the seller to worry about the consequences of failed transport.
Who pays for EXW shipping?
EXW (Ex Works) shipping typically refers to an international trade term used in global export/import. The cost of the merchandise is paid by the buying party, while the seller is responsible for arranging and paying for the goods to be available at the agreed upon place of delivery.
This means that with EXW shipping, the buyer is responsible for the expenses associated with picking up the goods, such as customs clearance, transport, and port fees. Additionally, the buyer is responsible for any additional services, such as packaging, loading, and insurance.
What is shipping EXW price?
Shipping EXW price is the price of a product that does not include any costs for transport or shipping services. This type of cost is typcially charged on an “Ex Works” basis, which means that the buyer is responsible for arranging and paying for all aspects of the transportation and insurance from the seller’s premises to the final destination.
This means that the Seller’s obligation is considered fulfilled once the goods are made available to the buyer at the seller’s location, usually a warehouse or factory, and the buyer is then responsible for all transport and insurance costs.
This type of cost structure is attractive for buyers who have the resources and capacity to organize their own transport and shipping, as they can avoid paying any additional costs associated with the seller’s handling of the shipping.
What is the disadvantage of using EXW?
One disadvantage of using EXW (Ex Works) is that it places the highest level of responsibility and risk on the buyer. This means that the buyer will be responsible for the full cost of the delivery, including collection, packaging, customs and transportation, which could prove costly depending on the distance and size of the shipment.
Also, if there are any delays during the transit, it will be up to the buyer to resolve this and contact the seller. Furthermore, the seller is also not responsible for any damages that may occur during the process, meaning that the buyer runs the risk of having to pay for a product that is unusable or broken.
Does Ex Works include tax?
No, Ex Works does not include tax. Ex Works, also known as Ex-factory, is an international trade term used to describe when a seller makes a product available at their premises but doesn’t include any of the costs associated with transport or any other services.
The buyer is responsible for all expenses and liabilities that arise from the point of originating collection, including tax. Therefore, you should keep tax considerations in mind when using Ex Works contracts.
Does EXW include delivery?
No, EXW does not include delivery. EXW stands for Ex Works, which is one of the Incoterms or international commercial terms that are standardized by the International Chamber of Commerce (ICC). EXW is the most basic arrangement in terms of buyer/seller payment arrangement and other responsibilities, and it stipulates that the seller is responsible for delivering goods to a designated location, typically their factory or warehouse, but the buyer is responsible for transporting and paying for the goods without any further obligations prepayable by the seller.
EXW therefore does not include delivery, but requires the buyer to arrange, cost, and insure their own transport and to pay all duties, taxes, and fees applicable to the goods.
What is a growing concern about the use of EXW as an Incoterm?
A growing concern about the use of EXW (Ex Works) as an Incoterm is the lack of liability protection it provides. Unlike other Incoterms, such as CIF or FOB which both provide the seller with some measure of protection, EXW leaves the seller liable for any damages that may occur during the transfer of goods from seller to buyer, including any costs incurred to arrange transport.
Furthermore, the seller is not responsible for any export duties, VAT, transport insurance or other costs related to the transport of the goods. This can leave the seller exposed and liable for any unexpected costs during transit, meaning there is a high risk associated with using this Incoterm.
Additionally, since the buyer is responsible for arranging the collection of the goods and for bearing all associated costs and risks, EXW may require more time, effort and cost from the buyer, which can be an added inconvenience.
Which is better FCA or EXW?
It really depends on your situation when it comes to deciding which is better between FCA (Free Carrier) and EXW (Ex Works). FCA allows the seller to deliver the goods to the buyer’s specified location.
Transfer of risk occurs once the goods have been delivered, at which point the buyer is responsible in case of loss or damage during transport. EXW however, requires the buyer to arrange their own pickup and transport of the goods.
The seller is not responsible for the goods once they have been made available for pickup.
In terms of cost, EXW usually provides the lowest cost option as the buyer pays for their own transportation. FCA however, can be more convenient for the buyer as they do not need to organize any sort of transport themselves.
Overall it really depends on your individual preference and what you want to achieve with your purchase. If cost is your top priority, then EXW may be the better option. If convenience is your goal, then FCA might be the better choice for you.
What does EXW price mean on Alibaba?
EXW (Ex Works) is a pricing term used on Alibaba that indicates a product will be ready for pickup at the supplier’s premises. It requires the buyer to arrange and pay for transportation and other costs associated with their delivery to their destination.
This includes customs duties and taxes, which are usually in addition to the unit cost of the item and can vary widely depending on the destination country. EXW is typically seen as the least expensive way to obtain goods, as it shifts the responsibility of logistics and transportation to the buyer.
While the buyer may benefit from lower initial costs, they need to ensure they have the necessary funding and transport to get their goods to the destination safely, legally and on time.
Who pays customs for EXW?
The cost of customs for goods sold on an EXW (Ex Works) basis are typically the responsibility of the buyer. EXW is a trading term used in international trade agreements which outlines the specific responsibilities each party must take.
Under an EXW agreement, the seller is responsible for the goods up to the point where they are made available to the buyer at the seller’s factory or warehouse. This means that the seller just has to package, arrange, and securely deliver the goods to the buyer’s location.
Once the goods have been made available to the buyer, they must assume the cost of customs. Customs can include duties, taxes, fees, and sometimes insurance. It’s important to ensure the parties involved in the transaction are aware of who is responsible for covering customs and any other charges related to the delivery of goods.
Does the sender or receiver pay customs?
The payment of customs fees depends on a number of factors, including the country of origin and the country of destination. Generally, the sender, or the importer, is responsible for paying customs. This is because the importer is responsible for declaring the goods and submitting accurate documentation to the customs authority in the country of destination.
Additionally, the sender needs to provide evidence of payment of customs when the goods arrive to their destination. In some cases, if the carrier or freight forwarder is handling the customs entry process, they may handle the payment as well.
However, customs costs can sometimes be split between the sender and the receiver, especially if the sender and receiver are from different countries and both subject to customs charges. In these cases, the sender pays the export taxes and other costs to get the goods out of their country, while the receiver pays the import taxes and other costs to accept the goods into their country.
What costs are included in EXW?
EXW stands for Ex Works which is a type of international trade term. It is used to refer to a transaction where a buyer takes delivery of goods at a supplied address and assumes control of them prior to full payment.
The costs included in EXW pricing are the cost of the goods being sold, the cost of packaging and loading the goods, and any applicable taxes, but the buyer is responsible for paying any additional transportation, customs clearance and insurance costs.
Additionally, the seller will not provide any services that could normally be expected of a forwarder – such as obtaining licenses or providing documentation. The buyer must arrange their own clearance, transport, insurance and even storage of the goods until they are safely reached by the designated recipient.
Responsibility for the goods is transferred to the buyer at the seller’s premises, meaning any damage or loss must be borne by the buyer.
Who is responsible for export clearance under EXW?
The exporter is responsible for export clearance under EXW or Ex-Works terms. This is because EXW terms are used when the seller has only made the goods available at their premises and have not done any packaging, loading, or other type of preparation to ensure that the goods are ready for transport.
As the seller is not responsible for any preparation, they are also not responsible for export clearance.
Therefore, the buyer is responsible for export clearance under EXW terms. This includes advancing and/or obtaining all necessary documents, such as the commercial invoice, customs declaration, and other relevant documents; covering all export taxes, customs duties, and other applicable fees; for loading and packaging the goods for shipping purposes; and for arranging for overland, air, or sea transport.
The buyer may also be responsible for obtaining any necessary export permits and arranging for the safe delivery of the goods from the seller’s premises to the final destination.
It is important to note that both the buyer and seller should clearly define the responsibilities for export clearance in the contract, and any agreements made regarding the costs and responsibilities should be written into the contract.
This will help to ensure that there is no confusion between the two parties, when it comes to who is responsible for export clearance.
What is the benefit for the shipper if using EXW?
EXW, or ‘Ex Works’, is a popular trade term used in international shipping. It is the most basic and minimal Incoterm, and gives the buyer full responsibility for the process of shipping the goods from the seller’s premises to the destination.
As with any Incoterm, EXW has many benefits to the shipper.
The main benefit of using EXW as an Incoterm is that it doesn’t require the seller to make any arrangement with regard to shipping. The seller, therefore, doesn’t have to worry about incurring any extra costs associated with shipping the goods, and passes this responsibility, and the associated cost, on to the buyer.
This can help the seller to reduce their expenditure, allowing them to remain profitable, or offer more competitive prices.
The buyer also benefits from using EXW terms as it gives them full control over the shipping process. This allows them to choose the best shipping provider and prices, as well as ensure the goods are packaged and shipped as required.
The buyer can also choose the method and route of transportation, which is particularly beneficial if they are shipping goods to multiple destinations, as they can select the most cost-effective option.
In conclusion, EXW terms can provide both parties with many benefits. For the seller, it allows them to remain profitable, or offer more competitive prices. As for the buyer, it gives them full control over the shipping process and route, meaning they can find the best shipping provider and prices for their goods.
