EXW

EXW is distinguished from other Incoterms by the minimal obligations it imposes on the seller. Unlike terms such as CIF (Cost, Insurance, and Freight) or DAP (Delivered at Place), in which the seller is responsible for various parts of the transportation process, EXW places all responsibility for transportation, including cost and risk, on the buyer.

With EXW, the buyer is fully responsible for export and import customs formalities. This includes obtaining the necessary export licenses, paying customs duties, and handling all customs inspections. Sellers should be aware of their limited obligations, but may choose to support the buyer in this process.

EXW may be less suitable for buyers inexperienced with international logistics or for situations where transportation is complex. For goods transported over long distances or via multiple modes of transportation, terms that require greater seller involvement, such as FCA (Free Carrier) or DDP (Delivered Duty Paid), may mean less risk and effort for the buyer.

Under EXW, the buyer bears all transportation costs from the seller’s location to the final destination. This includes domestic transportation in the country of origin, international transportation, and any domestic transportation costs in the country of destination. Buyers should consider these costs carefully when choosing EXW.

Although EXW does not require the seller to assist in transportation, sellers and buyers may agree that the seller will provide non-transportation-related services, such as loading goods or assisting with paperwork. Such assistance should be clearly agreed upon and documented to avoid misunderstandings.

Sellers should be aware of the limited obligations they have under EXW, as well as the importance of clear communication with buyers about the condition and location of the goods. In addition, sellers may consider offering guidelines or advice on the transportation process to ease the transition for the buyer.

Since the buyer is responsible for transporting the goods, he should also consider whether additional insurance is needed to cover the goods during transport. This is especially important for international shipments, where the risk of damage or loss may be higher.

EXW requires thorough planning and understanding of international trade practices. By carefully weighing the pros and cons and making strategic decisions about the use of EXW in specific transactions, both buyers and sellers can effectively manage their international trade activities.