EXW (Ex Works) is one of the 11 Incoterms® 2020 rules published by the International Chamber of Commerce (ICC). It can be used for any mode of transport. Under EXW, the seller delivers by placing the goods at the buyer’s disposal at the named place—often the seller’s factory or warehouse.
Where Delivery and Risk Transfer
Risk transfers when the goods are placed at the buyer’s disposal at the agreed place and point, not when they arrive at destination. The seller is not required under EXW to load the collecting vehicle or clear the goods for export.
Responsibilities
| Activity | Seller | Buyer |
|---|---|---|
| Make goods available at named place | Yes | — |
| Load collecting vehicle | Not required by EXW | Usually buyer risk/cost |
| Export clearance | Not required by EXW | Buyer, where legally possible |
| Main carriage | No | Yes |
| Import clearance/duties | No | Yes |
Why EXW Can Be Difficult in International Trade
EXW may create practical problems when the foreign buyer cannot legally perform export formalities in the seller’s country or when loading responsibility is unclear. In those cases, FCA is often more operationally suitable because the seller performs export clearance and delivery to the carrier at the agreed point.
Example
A buyer purchases machinery EXW Seller Warehouse, Manama. The seller packages and makes it available at the agreed location. The buyer arranges collection, export/import formalities where permitted, freight and insurance. Risk transfers when the machinery is made available at the agreed EXW point.
Common EXW Mistakes
- Assuming the seller must load the buyer’s truck.
- Using EXW when the buyer cannot handle export clearance.
- Naming only a city instead of a precise delivery point.
- Confusing who pays freight with where risk transfers.
Interview Question
Why might FCA be preferable to EXW for an export shipment? Because FCA can place export clearance and carrier handover with the seller while preserving a clearly defined delivery/risk-transfer point.
Reference: International Chamber of Commerce, Incoterms® 2020 — EXW explanatory notes: ICC Digital Library.
