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The Incoterm trade term "Ex-Works" (EXW), also being called
ex-factory, means the goods are available at seller's or exporter's
premises. The seller or exporter can minimize their risk by making the goods available
only at their own premises. The buyer or importer must load the goods then arranges and pays for transport, customs clearance and insurance.
As the buyer has to handle and pay for all transportation costs
including the inland portion in the country of origin, and assumed all
risks in the process, it is not an ideal trade option for the buyers or
importers who are not familiar with business practices have no
connections with any shipping agents or freight forwarders in the
country of origin like China in this case.
On the other hand, the ex-work trade could benefit the buyer or importer
if the buyer has their own shipping agent situated in China who can
offer the buyer some types of specially negotiated shipping rates. It is
conceivable that most sellers or exporters in China to certain degree
tend to add some extra amount to the actual CFR or CIF costs in order to
cover any unexpected expenses.
Sellers and buyers many add additional words and terms to the EXW
Incoterm. For example, "EXW-loaded" is sometimes added to the contract
wording if the seller is to load the goods. However, if you choose to
add words or clauses to your contract, you must make clear in writing
who carries out or pays for the extra work and who bears the risk.
Because the responsibility for moving goods is entirely up to the buyer,
EXW can be used for all types of transport, such as ocean, road and
railway.
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The
Seller or Exporter:
Under this Incoterm, if you are selling goods, you are responsible for making the goods available to your buyer from your premises or an appointed place (such as a factory or depot). Once you have made the goods available you are no longer responsible for them.
