Comprehensive guide to understanding Ex Works (EXW) Incoterm: roles, responsibilities, and the early transfer of risk from seller to buyer.
Seller makes goods available at premises; buyer arranges loading and transport
No insurance provided by seller
Transfers at seller’s premises upon goods’ availability
EXW means the seller makes the goods available at their premises, transferring risk to the buyer at that moment.
EXW (Ex Works) is an international trade term in which the seller’s obligation is limited to making the goods available at their own premises (factory, warehouse, etc.). From that point, the buyer is responsible for all costs and risks, including loading (if not agreed otherwise), export clearance, transportation, and import procedures.
Compare EXW with other Incoterms to understand the key differences in seller and buyer responsibilities.
Understanding your obligations under EXW (Ex Works) terms
Prepare, package, and make the goods available at the seller’s premises.
Arrange and pay for loading, transport, export/import clearance, and all subsequent handling.
| Responsibility | Seller | Buyer |
|---|---|---|
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Export Packing & Marking
Ensuring goods are export-ready Seller must properly pack and mark the goods so they are ready for pickup. |
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Export Documentation
Basic documents provided Seller provides a commercial invoice and packing list. Export clearance is arranged by the buyer. |
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Main Carriage
Transport from seller's premises Buyer arranges and pays for all transport from the seller’s premises to the destination. |
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Insurance Coverage (Optional)
Buyer arranges insurance Seller does not provide insurance. It is up to the buyer to secure coverage for the goods during transit. |
Optional Extra | |
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Import Clearance
Customs duties and taxes Buyer is responsible for all import duties, taxes, and customs clearance procedures at the destination. |
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Destination Handling
Unloading and delivery Buyer bears all costs related to unloading and final delivery at the destination. |
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Additional Costs
Extra fees and charges Any extra charges incurred beyond the seller’s minimal obligations. |
Important information about risk transfer and liability
Under EXW, risk transfers to the buyer as soon as the goods are made available at the seller’s premises – even before loading.
Under EXW, the seller’s obligation ends at making the goods available. Any damage incurred during loading and transit is the buyer’s responsibility, so appropriate insurance should be secured by the buyer.
Any claims for damage during transit should be filed by the buyer with their insurance provider, as the seller is typically not involved beyond making the goods available.
Under EXW, the seller’s responsibility ends when the goods are made available at their premises, transferring risk to the buyer immediately, whereas under CIF the seller arranges sea transport and provides minimal insurance until the port of destination.
Choose EXW when you prefer that the seller’s obligation is limited to making the goods available at their premises, giving you complete control over loading, export/import clearance, and transport. In contrast, DDP requires the seller to handle the entire delivery process.
EXW can be advantageous if you have a robust logistics network, as it allows you to select and negotiate with your own carriers across various modes. However, it also means taking on full responsibility for coordination and risk from the very start.
Under EXW, the seller’s duty ends at their premises. The buyer is fully responsible for both export and import customs procedures, including obtaining licenses and paying any duties.
Since the seller’s responsibility is limited to making the goods available, EXW requires the buyer to secure comprehensive insurance covering loading, transport, and import risks.
Common pitfalls include underestimating the extensive responsibilities on the buyer, such as coordinating loading, export clearance, international transport, and securing appropriate insurance from the moment the goods are available.
Typically, the seller provides a commercial invoice and packing list. The buyer must arrange for any additional export documents and all import paperwork.
Disputes under EXW terms are typically resolved through negotiation based on clear contractual agreements. Since the seller’s obligation is minimal, disputes usually focus on the condition of the goods at pickup and should be addressed via mediation or arbitration.