EXW

Minimum obligations for the seller under EXW

Under this type of Incoterms, the seller performs only a few basic tasks:

• prepares goods for shipment: labels and packages according to the type of transport and method of transportation;
• delivers the cargo to the access point - a pre-agreed location (this can be a warehouse, factory, office, etc.);
• provides standard trade documents (such as a commercial invoice or packing list) if necessary.

For the buyer who plans freight transportation under the terms EXW, it is important to understand that the seller is not obliged to load the goods into the transport provided for transportation, does not engage in export customs clearance, does not organize cargo delivery, does not pay for freight, insurance and further costs.

What does the buyer (or logistics partner) undertake with EXW?

From the above, it becomes clear that the buyer is fully responsible for the further path of the goods:

• organizes and pays for loading goods onto a vehicle for transportation along the route;
• if necessary, delivers the cargo to the port of departure, prepares export documentation and passes customs;
• assumes the costs of freight, transportation by sea, air, road, train, multimodal, depending on the route and destination;
• arranges cargo insurance (insurance is not mandatory for EXW, but recommended, especially for international transportation);
• Upon arrival, unloading and customs clearance are organized, customs duties, taxes, and other mandatory payments are paid, and delivery to the final address is also carried out.

So, EXW – these are clear, precise and flexible delivery terms that allow the seller to simplify their obligations as much as possible, and the buyer to take control of the entire delivery process.

If you have the experience, desire to manage your own transportation or logistics resources and a reliable partner, then EXW can be a great option.

For whom are such conditions beneficial, and when should you be careful?

Actually, EXW – this is the best option for a seller who wants to minimize his involvement in freight transportation: it is enough to pack the goods and simply inform the buyer that he can pick them up at the agreed location.

For the buyer, EXW is a way to take control of the entire delivery process: from the seller's warehouse to the final destination, with the ability to choose carriers, routes, insurance, etc.

At the same time, the responsibility for the entire journey and all formalities also falls on the shoulders of the recipient: if everything is organized transparently and reliably, you get maximum flexibility, but in conditions of inexperience or lack of reliable partners, it can lead to unforeseen difficulties.

In which cases is EXW justified:

• if the buyer (or his logistics partner) is well versed in international transportation, has experience working with transport, customs and documentation;
• when you need maximum control over transportation: you can independently plan and choose the route, carriers, insurance, and optimize costs;
• possible in conditions when the cargo is shipped from a country with complex export rules: a buyer who knows the local specifics will prefer to take everything "into their own hands."

When EXW is not the best choice:

• if the buyer does not have a reliable partner who will take care of logistics, or he is not familiar with export-import formalities: in this case, the risks are high - delays, errors at customs, unnecessary expenses;
• When it is necessary to minimize the risks of damage or loss of cargo, it is wiser to use terms under which the seller is responsible for part of the route (for example, FCA, FOB, etc.), where responsibilities and risks are distributed differently.