Incoterms EXW

According to Incoterms, EXW (“Ex Works”) is an international trade term that obliges the seller to make the goods available to the buyer at the factory, warehouse, company, or office. On the other hand, the buyer is responsible for all further transportation, documentation, and customs clearance.

Features of delivery on EXW terms

Under Incoterms EXW, the seller is only responsible for making the goods available at their premises, and the buyer is responsible for loading the goods onto the vehicle, obtaining all necessary export licenses and documents, paying for all transport costs, insurance, and customs duties, and carrying out any import formalities.

Incoterms EXW mirrors the DDP parameter, i.e., with EXW, the buyer takes all costs, and in the case of DDP – the seller. EXW is often used when the buyer has their means of transportation and wants maximum control over the shipping process. However, it can also be risky for the buyer, as they bear all the responsibility for the goods once they leave the seller’s premises.

Therefore, it’s essential for both parties to clearly define their duties and obligations in the contract to avoid any misunderstandings or disputes.

Seller’s requierements

The seller must properly pack the goods, label them, and deliver them to the place agreed with the buyer. The seller can also facilitate the receipt of export licenses or other documentation upon request, but the consignee must pay the associated taxes and fees.

Seller’s obligations

Under EXW terms, the seller’s obligations are limited to the following:

1. Making the goods available: The seller must make them available at their premises or elsewhere specified in the contract. The seller is responsible for ensuring the goods are available at the agreed time and place.
2. Packaging and labeling: The seller is responsible for packaging and labeling the goods by any agreed-upon specifications and ensuring that they are ready for collection by the buyer.
3. Providing commercial invoice: The seller must provide a commercial invoice, which includes a description of the goods, their value, and any other relevant information required for customs clearance.
4. Export declaration: The seller must provide the buyer with any necessary documentation or information to enable them to obtain an export declaration or any other required authorization for the export of the goods.

Under Ex Works terms, the seller’s obligations are limited to making the goods available and providing some essential documentation. The buyer is responsible for arranging transportation, obtaining any necessary licenses or permits, and paying for all costs of transporting the goods from the seller’s premises to the final destination.

Buyer’s requirements

Once the products are in the hands of the buyer, they must cover the risks associated with their further delivery. This may include shipping and loading operations, transportation to the sea or airport, duties, and taxes.

Buyer’s obligations

Under EXW terms, the buyer’s obligations include the following:

1. Collecting the goods: The buyer must collect the goods from the seller’s premises or another named place, as specified in the contract. The buyer is responsible for arranging and paying for the transport from the seller’s premises to the final destination.
2. Export declaration: The buyer must obtain an export declaration or any other required authorization for the export of the goods and provide the necessary documentation to the seller to enable them to complete any needed customs formalities.
3. Preparing shipping documents: The buyer is responsible for preparing and providing any shipping documents required for transporting the goods, such as bills of lading, airway bills, or other transport documents.
4. Loading the goods: The buyer is responsible for loading the goods onto the vehicle and ensuring that the goods are correctly secured for transport. The seller may assist with loading if requested by the buyer.
5. Clearing customs: The buyer is responsible for clearing the goods through customs and paying any associated customs duties or taxes.

Under EXW terms, the buyer has greater responsibility and control over the transportation and handling of the goods. The buyer must arrange for the transport of the goods, obtain any necessary licenses or permits, and pay for all costs associated with transporting the goods from the seller’s premises to the final destination.

Incoterms EXW is recommended for entrepreneurs with extensive experience in the delivery and import processes, as these terms impose all responsibility on the recipient than the sender.

In cases where the recipient is away from the country of export or needs to learn the details of transportation, it is better to entrust delivery to a forwarder. The logistics company PartnerTrade organizes freight transportation on EXW terms, customs clearance, warehouse storage, and last-mile delivery.

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