what is ex works in shipping

what is ex works in shipping

1 year ago 70
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Ex Works (EXW) is a type of shipping arrangement in international trade where the seller makes goods available to the buyer, who then pays for transport costs. Under EXW, the seller is only responsible for making the goods available at a predetermined location, such as the sellers nearest port, and the buyer bears responsibility for shipping costs and risks. The seller must safely package goods, label them appropriately, and help the buyer get export licenses or other required paperwork, although the buyer must pay the actual fees for the documents. The buyer must arrange all transport, export documentation, cover all freight charges, and fulfill the importation and delivery process. Once the buyer collects the cargo, the buyer assumes all other responsibilities, including transport to the port of destination.

EXW is an Incoterm used for all forms of shipping, regardless of the mode or legs of the transport. It is ideal for businesses that want to cut costs by removing the sellers value-added for shipping. For example, if a company has priced a product from another company with an EXW shipping cost of $200, they can find a third-party shipper to deliver the product for $170 to save money.

EXW is the most practical solution for shipping products in certain circumstances. For instance, businesses who routinely purchase from one country can take advantage of EXW if they plan to consolidate products from multiple suppliers and consolidate the products together. Another instance a buyer might want to opt for EXW is if they are shipping via Air Express, as express couriers often collect the cargo from the sellers location and include all the transport and export formalities in their service.

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