EXW Explained: Ex Works Delivery Term Guide
EXW (Ex Works) places the minimum responsibility on the seller. Goods are made available at the seller's premises and the buyer arranges everything from loading to final delivery, including export customs.
What Is EXW?
EXW (Ex Works) is the Incoterms 2020 delivery term with the minimum level of seller responsibility. The seller simply makes the goods available at their premises (factory, warehouse, or named place). The buyer is responsible for all costs and risks from that point: loading, inland transport, export customs, main carriage, insurance, import customs, and final delivery.
EXW is one of the five most commonly used Incoterms globally. However, the ICC recommends FCA as a better alternative for international trade because EXW places export customs responsibility on the buyer, which is impractical in most cross-border scenarios.
Responsibility Split
| Task | Seller | Buyer |
|---|---|---|
| Make goods available | Yes | |
| Loading | Yes | |
| Export customs | Yes | |
| Main transport | Yes | |
| Insurance | Yes | |
| Import customs | Yes | |
| Final delivery | Yes |
Pros and Cons
For the Seller
Minimal risk and responsibility. Simple pricing (production cost + margin only). No transport or customs organization needed.
For the Buyer
Full control over the entire transport chain. Can choose own carriers and consolidate from multiple suppliers. But: export customs in a foreign country is often impractical.
When to Use EXW
- Buyer has strong logistics capability and local knowledge
- Buyer consolidates from multiple suppliers
- Domestic (same-country) transactions
- Seller has no export capability
For international trade, ICC recommends FCA over EXW because FCA places export customs with the seller (the natural party).
Frequently Asked Questions
Is EXW the cheapest price?
It is the lowest quoted price because it excludes all transport costs. But the buyer's total cost may be higher since they must arrange everything separately.
Who is responsible for loading under EXW?
Technically the buyer. In practice, sellers often assist. Loading damage risk falls on the buyer.
Why does the ICC prefer FCA over EXW?
FCA places export customs on the seller (natural party) and defines a clearer risk transfer point. EXW export customs on the buyer is impractical for cross-border trade.
Is EXW suitable for Turkey-Europe trade?
Generally no, because the foreign buyer would need to handle Turkish export customs. Kolay Parsiyel recommends DAP or DDP for Turkey-Europe shipments.
References
- ICC Incoterms 2020
- UNCTAD Trade Terms Guide
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