EXW: collection from the seller's warehouse
The delivery term EXW, or Ex Works, is a basis with a minimal set of seller's obligations: the seller makes the goods available on their own premises at the agreed place and there ends their involvement.
Loading, carriage, insurance, export and import clearance are taken on by the buyer. Risk passes at the moment the goods are placed at the buyer's disposal, still before loading onto the vehicle.
Explanation
The name of the term translates as "from the works" or "from the warehouse". The seller is not obliged to load the goods, is not obliged to arrange export clearance and is not obliged to hire a carrier. Their task is to prepare the goods and say where and when they can be collected.
The obligations of the parties look like this.
| Delivery stage | Seller | Buyer |
|---|---|---|
| Packing the goods | Yes | No |
| Making the goods available at the agreed place | Yes | No |
| Loading onto the transport | No | Yes |
| Carriage to the destination | No | Yes |
| Cargo insurance | No | Yes |
| Export clearance | No | Yes |
| Import clearance | No | Yes |
| Unloading at the destination | No | Yes |
EXW applies to any mode of transport, but in meaning it is a basis for a buyer with their own logistics. The term must be supplemented with the exact place: "EXW, seller's warehouse, address". Without the place the basis does not describe the delivery.
Incoterms allocates costs, risks and obligations for delivery. It does not describe the payment procedure, the transfer of ownership, the quality of the goods, guarantees and penalties — all of that is recorded in the contract.
The buyer's obligations
Under EXW almost the whole chain rests on the buyer. They provide the transport, load the goods, carry them, insure them, arrange export clearance in the seller's country and import clearance in the destination country.
Practical consequences.
- The transport must be provided at the agreed time. If the vehicle is late, liability for demurrage at the seller's site lies with the buyer.
- Loading is the buyer's job. They organise the equipment, the crane or the manipulator themselves.
- Export clearance is also the buyer's job, and this is the most vulnerable point of EXW.
- The buyer arranges cargo insurance at their own discretion; the seller is not involved in this.
- The documents the seller hands over are minimal: the goods and the accompanying documents for the batch.
The key difficulty is export. In an international trade the buyer must arrange the removal of the goods from the seller's country, and that means working with the customs of a foreign country, often without a local representative. In practice such a scheme is rarely used: it is replaced by FCA, where export clearance remains with the seller and the buyer still organises carriage.
Risks
Risk passes to the buyer at the moment the goods are placed at their disposal at the agreed place and at the agreed time. Loading has not yet begun at that moment, and this is fundamental: if the goods are damaged while being lifted by a crane or while being placed in the body, as a general rule the loss is borne by the buyer.
| Situation | Who bears the risk | What to do |
|---|---|---|
| The goods are damaged during loading | Buyer | Agree the loading procedure and record the condition before work begins |
| The vehicle is late, the goods are waiting | Buyer | Plan the provision of transport and allow a time reserve |
| The goods are damaged in transit | Buyer | Arrange cargo insurance in advance |
| Export is not cleared | Buyer | Check whether removal can be cleared in the seller's country |
| The cargo is held up on import | Buyer | Prepare the import documents before dispatch |
| The goods do not match the specification | Under the contract | Carry out acceptance by quality before loading, not after |
A simple recommendation follows from the table: under EXW acceptance by quantity and quality is carried out before loading, on the seller's premises. Once the goods have left, it will be difficult for the buyer to prove that the damage did not occur during carriage.
When to choose it
EXW is appropriate when the buyer fully controls logistics and is ready to take on the whole journey. Typical cases: delivery within one country, collection from a metal depot, purchasing in small batches with fast removal, a buyer working through their own freight forwarder with clearance experience.
EXW should not be chosen for an international trade if the buyer is not ready to arrange export clearance in the seller's country. In that case take FCA: the allocation of carriage costs will remain convenient for the buyer, while the seller takes on export clearance.
The second case where EXW creates problems is loading. Under the term the seller is not obliged to help with loading, but in fact the cargo often lies on their premises and it is more convenient for them to load it. If this point is not discussed, the parties will understand differently who calls the equipment and who pays for the demurrage.
What to write in an order on the exchange. The basis and the mode of transport are set before matching and are carried over into the trade without renegotiation, so word it precisely: "EXW, Incoterms 2020, seller's warehouse, address". An order lives in one market: one commodity, one currency, one unit of quantity, and the delivery points of counter-orders must overlap. The shipment week is stated as an ISO week from Monday to Sunday, and it must coincide for the parties: an order without a match expires on the Monday of that week.
Frequently asked questions
EXW delivery terms — what are they
This is a basis with minimal seller's obligations: the seller makes the goods available on their own premises, and the buyer loads, carries, insures and arranges export and import clearance themselves. Risk passes before loading, at the moment the goods are placed at the buyer's disposal.
Who pays for loading under EXW
The buyer. Under this term the seller is not obliged to load the goods onto the transport. If the seller in fact performs the loading, the parties agree on this separately in the contract, because the term itself does not create such an obligation.
Where does risk pass under EXW
At the moment the goods are placed at the buyer's disposal at the agreed place and at the agreed time. Loading has not yet begun, so damage during loading is the buyer's risk. Acceptance by quality is best carried out before work begins.
Can EXW be used in an international trade
Technically yes, but the buyer will have to arrange export clearance in the seller's country, which is inconvenient and requires local experience. In practice FCA is more often taken for international deliveries: the buyer organises carriage, while export clearance remains with the seller.
How does EXW differ from FCA
By the point where risk passes and by the export obligations. Under EXW risk passes on the seller's premises before loading, and the buyer arranges export clearance. Under FCA risk passes when the cargo is handed to the carrier, and the seller takes on export clearance.
Who arranges export clearance under EXW
The buyer. This is the main inconvenience of the term for international trades: the buyer works with the customs of a foreign country. If that is not possible, choose FCA.
What to state in an order with an EXW basis
The term, the edition of the rules and the exact place: "EXW, Incoterms 2020, seller's warehouse, address". The basis and the mode of transport are carried over into the trade without renegotiation, and an unmatched order expires on the Monday of its shipment week.
What to do next
- Incoterms 2020: delivery bases in simple words — all 11 terms and how to choose a basis.
- FOB: what it means and where the seller's responsibility ends — a basis for sea shipments.
- FCA, CPT, CIP: transitional delivery terms — universal terms instead of EXW in an international trade.
- Sell stainless steel — how the seller's side works on the exchange.
- Open an account — registration is free, state the basis and the delivery place in the order.