What is EXW?
EXW · Ex Works
The buyer collects from the seller’s premises and handles everything thereafter, including export clearance. Rare in cross-border commodity trade because the buyer carries obligations it usually cannot discharge in the seller’s country.
Key points
- The least seller obligation of any Incoterms rule.
- The buyer must clear for export in the seller's country — often impossible.
- Use FCA instead wherever the trade crosses a border.
At a glance
| Who loads | Buyer, formally |
|---|---|
| Export clearance | Buyer |
| Risk transfers | At the seller's premises |
| Import clearance | Buyer |
| Better alternative | FCA |
| Best for | Domestic sales and price comparison |
The minimum seller obligation
EXW — Ex Works — requires the seller only to make the goods available at its own premises. It carries the least seller obligation of any Incoterms rule. The buyer loads, transports, clears for export, ships, clears for import and pays duties.
Even loading is formally the buyer’s. In practice the seller usually loads because it has the equipment, but under a strict reading the risk of that loading sits with the buyer.
Why it seldom suits international trade
The problem is export clearance. Under EXW the buyer must clear the goods for export from the seller’s country — something a foreign buyer often cannot legally do, because export declarations typically require a locally registered entity.
That is why FCA is the better rule where the intent is “buyer collects”. FCA is identical in spirit but places export clearance with the seller, where it can actually be performed.
Where it does appear
EXW is common in domestic sales, in ex-works pricing quoted for comparison, and where a buyer with a local presence genuinely will handle everything.
In cross-border commodity trade it is usually a sign that a price has been quoted without thinking through who files the export declaration.
Frequently asked questions
- Why is EXW risky for international buyers?
- Because the buyer must clear the goods for export from the seller’s country, which usually requires a locally registered entity. A foreign buyer often cannot, leaving the shipment stuck.
- What should be used instead of EXW?
- FCA — Free Carrier. It keeps the collect-from-seller structure but places export clearance with the seller, who can actually perform it.
- Does the seller load the truck under EXW?
- Not as an obligation. The rule places loading risk on the buyer, though sellers commonly load in practice. If the seller is to load at its own risk, say so or use FCA.
Related terms
The seller delivers the goods on board the vessel at the named load port and clears them for export. Risk and cost transfer to the buyer once the cargo is loaded, so the buyer arranges and pays for ocean freight and insurance.
The seller bears cost and risk all the way to the named destination, ready for unloading. Import clearance and duties remain the buyer’s responsibility.
As CFR, but the seller also buys marine insurance for the voyage. Risk still transfers on loading at origin; the buyer simply has a policy to claim against. Standard minimum cover is Institute Cargo Clauses (C) unless the contract says otherwise.
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