“EXW Incoterms Shipping from China: The Complete Guide
What is EXW?
EXW is an Incoterm that describes when the seller provides the product at a specified location and the buyer of the product must bear the shipping costs.
What are the responsibilities of the buyer and seller of an EXW agreement?
Below, we will discuss the responsibilities of buyers and sellers under the EXW Agreement.
Seller’s responsibility
According to EXW Incoterms, the seller’s liability is very low. Essentially, their only requirement is to ensure that the goods are packaged for export and that they can be collected from their location. For most shipments, this means that the product is already packed in export cartons. When the goods are ready, they must be in an area where the buyer can pick it up from the seller.
These are the sole responsibility of the seller.
Buyer’s responsibility
The buyer assumes all risk and responsibility after picking up the goods from the seller. These responsibilities include:
Loading Charges: Loading the goods at the pick-up location so that the goods can be transported to the port for export.
Ship to Port/Location: Ship the goods to the port of origin to begin the export process.
Export Duties, Taxes, and Clearance: All export documents, and pay duties on any exported goods. Buyers have to rely on their own way of exporting.
Origin Terminal Fees: Buyer is responsible for paying all fees at the terminal.
Loading on Carriage: Responsibilities associated with loading cargo into the carriage.
Shipping Charges: All shipping costs associated with shipping goods from one port to another.
Insurance: While not required, insure your shipment against damage, theft or loss.
Destination Terminal Charges: All charges related to charges charged by destination ports and terminals. When the cargo arrives at the port of destination, the terminal charges a fee to unload the cargo from the ship and transfer it throughout the port.
Shipping to Destination: The cost associated with shipping the goods from the port of destination to the final destination.
Unloading at Destination: Charges associated with unloading the cargo from the final carrier after the cargo has reached its destination.
Import duties, taxes and customs clearance: All duties and taxes associated with importing goods into the country of destination.
Advantages and disadvantages of EXW
In Ex Works, importers are responsible for all risks and costs from the time the goods are delivered to them.
Therefore, diligent and comprehensive planning is necessary.
EXW can be complicated and tricky for buyers shipping from China.
This is because they still require authorization or communication from suppliers to clear goods through customs.
Alternatively, provide the documentation to the shipping partner during shipping.
For sellers with little knowledge of logistics and overseas shipping in China, shipping on ex-factory terms may be the best option.
Consider that the seller’s sole responsibility is to ensure that the goods are properly packaged for delivery to the buyer’s disposal.
The impact on suppliers is minimal.
But regardless of risk reduction, EXW terms may not be the most economical option for sellers.
When you decide to use EXW Incoterm alone as a supplier, buyers may choose another seller that is more attractive and easier to deal with.
EXW Agreement FAQ
How is EXWorks pricing calculated?
Shipping via EXWorks requires the buyer to bear all shipping costs, including pickup from the factory, inland shipping, exporting, importing, and shipping to final destination. To calculate the cost of this type of transportation, each segment of the journey must be considered. If you ship from China, Guided Imports can provide a detailed quote for your unique shipment.
What is the difference between EXW and FOB?
In EXW shipments, the buyer is responsible for all shipping costs and must pick up the goods from the seller. In a FOB shipment, the seller is responsible for exporting and paying for loading the goods onto the ship. Once the goods are loaded, all transportation costs after the goods are loaded shall be borne by the buyer.
Do EXW Incoterms include duties and taxes?
Buyer is responsible for all import duties, taxes and customs clearance when shipping under EXW Incoterms. EXW requires the buyer to handle all aspects of the export, freight and import process. The seller is only responsible for export packaging.
What is Alibaba’s EXW?
When Alibaba sellers quote EXW prices, they say that buyers must pick up the goods from the seller’s loading dock. EXW puts all shipping responsibility on the buyer, which means they have to organize aspects such as export, shipping, import duties, taxes and customs clearance. EXW is rarely recommended for new Alibaba buyers unless shipping by air from China.”
