Ex Works is one of the most commonly used Incoterms in freight forwarding. It clarifies at which point the responsibility for goods passes from the seller to the buyer.
In the case of Ex Works, that happens when the seller makes the goods available at their warehouse. Once the buyer picks up the goods, they take on full responsibility for the costs and risks.
In this article, we’ll explain what Ex Works means in detail, its benefits and who it’s most suitable for. If you’ve ever had a question about Ex Works, this is the article for you.
Ex Works (or EXW for short) is a door-to-door shipping term – and one that has the least risk for sellers. That’s because the buyer (you) is responsible for the entire transportation process, from the supplier’s warehouse to your UK port.
That means you must:
Using Ex Works terms gives you complete control of your shipment as a buyer. That means you can choose your preferred transportation partner for the entire journey and don’t have to rely on the supplier’s courier to get your goods to the port on time.
It also gives you a much clearer understanding of costs. When one company is responsible for the entire process, it is relatively straightforward to calculate the full cost of transport, logistics. It also means you’ll be able to find the best quote available. we have developed a guide on the topic of understanding freight costs.
Finally, Ex Works allows you to choose how you clear customs and whether or not you use a broker. Of course, that’s also the biggest disadvantage with Ex Works. Clearing customs in the country of origin can be tricky and complicated if you don’t work with an experienced partner.
In short, very little. Because you become responsible for the goods at the supplier’s warehouse, you’re responsible for almost everything. The only thing the seller needs to do is properly pack the goods and provide paperwork and documentation to allow the goods to clear customs in the country of origin. That being said, you would be liable for any issues at customs under Ex Works.
As the buyer, you take on all of the risks, costs and responsibilities of transporting the goods from their warehouse to yours in the UK. You will also need to arrange and pay for insurance.
The International Chamber of Commerce has developed a set of 11 Incoterms in total. The trading terms outline at which point responsibility for the goods transfers from the seller to the buyer. You can find a complete list below ranging in order from the least responsibility for the seller to the most.
Free on Board (FOB) is the other most popular Incoterm when shipping from the far east to Europe. In fact, it’s slightly more popular with Ex Works.
When shipping Free on Board, sellers and buyers share more of the responsibility for goods. Sellers take full responsibility up until goods are loaded onto ships. They must transport the goods to port, pass customs and pay for the goods to be loaded. The buyer is responsible for everything after that.
Free on Board shipping still lets you know your costs in advance – and those costs will be cheaper than shipping via Ex Works.
Hundreds of businesses trust DG International to ship goods on Ex Works terms from China to the UK, Europe or the U.S. Our unique combination of technology and exceptional customer service means we can deliver a service that surpasses anything they’ve experienced before. Find out more about our level of service by speaking to a consultant or start building your own quote today.