EXW Incoterms 2020 : A Few Quick Points
- Ex Works (EXW) Incoterms can be used for all modes of transport and even when there are multiple modes of transport involved in transportation.
- Risk transfers from seller to buyer when the seller makes the good available at the seller’s premises.
When EXW is used in a contract, the named place is mentioned. For example, if a company in Malaysia is selling on EXW terms to anybody, the Incoterms in the sales contract should mention:
EXW (Seller warehouse, Kuala Lumpur, Incoterms 2020)
Shipping EXW Incoterms: Delivery & Transfer of Risks
The goods are delivered and risks transfers when the cargo is placed ready for collection at the pre-determined place in the seller’s premises. As with all Incoterms, and especially with EXW, it is highly advisable that the exact place of delivery is defined. For example, if the cargo is out of gauge, it must be clear whether delivery is made inside the seller’s warehouse or at the dock. If delivery is made within the seller’s warehouse and hacking of pillars and walls are required to remove the item from the warehouse – the buyer will have to pay for these activities.
Shipping EXW Incoterms: Insurance
The seller has no requirement to buy insurance for the cargo’s transport.
Shipping EXW Incoterms: Carriage
The seller has no obligation to pay for or arrange carriage.
Shipping EXW Incoterms: Customs clearance
The seller might be required to assist the buyer with information necessary for export, however the seller is not obligated to act as the exporter of record.
Shipping EXW Incoterms: Packaging & Marking
Seller must ensure and pay any costs related with ensuring that the cargo is delivered in acceptable condition. This would mean the seller has to pay for quality checks, weighing operations and/or counting etc. The seller must package the goods at the seller’s cost.
Shipping EXW Incoterms: Cost allocations
The allocation of costs between buyer and seller are as follows:
- Any insurance cover requested
- Any costs involved in obtaining documents for import clearance
- Duties, taxes and other costs related to import and export
- Any costs incurred due to a failure to give reasonable notice to seller when it is agreed that the buyer is allowed to choose the time for departure from origin or receiving at destination
- All costs up to the point of delivery.
Shipping EXW Incoterms: Notices
- The seller must use the usual methods to notify the buyer that delivery has been made
- The buyer must give the seller enough notice time to deliver the cargo at the buyer’s chosen time (if agreed that the buyer can choose the time)
Is EXW a good Incoterm to use?
EXW really should only be used by buyers who are very familiar with local Customs procedures. It must be kept in mind that the seller is under no obligation to help the buyer export the cargo from the origin.
We have a more comprehensive article on Incoterms 2020 that you can find here.