Bob Ronai
Bob has over 50 years of experience in exporting and importing, beginning in international banking and later transitioning to international commerce.
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Contents
Ex Works Incoterms (EXW)
Ex Works (EXW) is defined in the Incoterms® 2020 rules as the process by which the seller delivers goods at their premises or another named location.
Introduction to Ex Works Incoterm
Under the EXW rule, the seller makes the goods available for collection, which means they do not need to handle loading or transportation once the goods leave their property. This arrangement is highly favorable for sellers.
Delivery is deemed complete once the seller notifies the buyer that the goods are ready for collection. From that moment, the buyer assumes all risks and obligations, including payment, even if the seller still possesses the goods.
Key Changes in Ex Works 2020 Rule
For exports, EXW poses significant challenges since the buyer is responsible for export clearance, and typically, only entities registered in the exporting country can perform these functions.
Ex Works Podcast
Seller and Buyer Obligations for Ex Works
EXW A1 / B1 General Obligations
A1 (General Obligations)
The seller must provide goods and any necessary commercial documentation as required by the sale contract.
B1 (General Obligations)
Buyers must pay the agreed price for the goods stated in the sales contract, with details regarding when and how payment is made typically specified in the contract.
EXW A2 / B2: Delivery
A2 (Delivery)
Delivery occurs when the seller makes the goods available for collection, which usually takes place at their own premises or another agreed location.
Advantages and Disadvantages of Ex Works (EXW)
The EXW terms have been part of trade since the initial Incoterms® were established in 1936, originally marking a seller’s minimal obligations.
While the seller appears to benefit from reduced responsibility, the buyer might face challenges if not equipped to handle export processes, particularly when navigating foreign markets and local taxation laws.
EXW is generally more suited for domestic transactions that lack complex compliance issues related to exports and international laws.
This paraphrased version retains the main ideas while showcasing them in organized sections with clear headings.
