EXW (Ex Works) Shipping Terms: What Buyers Need to Consider

One of the simplest types of logistics is transportation under EXW terms. However, both parties should be aware of certain details that affect the transaction.

What Are EXW (Ex Works) Shipping Terms?

EXW (Ex Works) terms indicate that the seller fulfills their responsibilities under the sales contract once the product is made available to the buyer at the seller’s facility, warehouse or sales yard. This means the seller’s obligations end when the goods are ready for pickup, and from that point, the buyer is responsible for all aspects of the transportation process.

Characteristics of EXW Shipping Terms

EXW terms are suitable for any transport mode, whether by land, sea or air. They also apply to multimodal shipments or when the buyer uses their own transport without involving third-party logistics providers or intermediaries.

EXW is convenient when the buyer needs to collect goods from multiple suppliers. However, loading at the seller’s facility can be challenging without the buyer’s own handling equipment and staff. 

Additionally, in many countries, including those in the Eurasian Economic Union, only a registered local entity can submit customs declarations and pay related fees. This often requires the buyer to engage agents or intermediaries if they are not a resident.

Buyer’s Responsibilities

EXW terms are generally not favorable for the buyer, as the seller is not involved in customs clearance. This places full responsibility for export procedures on the buyer. The buyer also assumes all risks, as they are responsible for loading and unloading the goods, and any force majeure events during transit fall under their liability.

If the seller has limited experience with EXW terms, it is advisable to seek assistance from logistics professionals, such as ETS or consider using FCA terms, which provide additional support from the seller.

Seller’s Responsibilities

Under EXW, the seller is not obligated to load the goods onto the buyer’s vehicle or handle customs documentation. However, they may assist in these areas if agreed upon. The seller’s primary obligation is to inform the buyer that the goods are ready for pickup and allow access for loading.

Additional responsibilities, such as customs clearance or import duties, can only be assigned to the seller if specified in special agreements.

Required Documents for EXW

The seller must provide the buyer with all necessary documents for export, including:

• Customs declarations;
• Commercial invoices;
• Export records;
• Certificates of origin;
• Installation and operation instructions (if applicable);
• Any other required documentation;

For instance, if a buyer purchases goods from the seller on EXW terms, they usually don’t need a transport document (TTH) for automotive transport, as the goods transfer directly to the buyer on the seller’s territory.

EXW Pricing: How the Cost is Calculated

The price under EXW terms as per Incoterms 2020 is indicated on the invoice and includes only the final product cost without covering additional export or delivery costs. In practice, paying without extra services included in the price is often impractical. 

Thus, while EXW may seem convenient, it often proves complex and challenging for the buyer, as they bear full responsibility for transportation. To ensure proper document handling, it’s best to work with a logistics company like ETS.