EXW, which stands for Ex Works, is an international commerce term that is commonly used in foreign trade transactions. It is one of the trading terms developed by the International Chamber of Commerce (ICC) which are known as Incoterms.
The EXW term specifies the minimum obligations of the seller in an export transaction. Under EXW terms, the seller makes the goods available at their own premises, usually a factory or warehouse. This means the buyer is responsible for all further costs and risks involved in transporting the goods from the seller's location to the final destination.
The key things to know about EXW terms are:
Seller must make the goods available at their premises and provide access to the buyer to collect them. They do not need to load the goods on any collecting vehicle.
Buyer bears full responsibility, costs, and risks for loading the goods and transporting them from the seller's premises onwards. This includes transport, insurance, duties and taxes, etc.
The passing of risk occurs as soon as the goods have been made available at the seller's and the buyer has been informed. At this point, the buyer bears responsibility even for loss or damage.
EXW places a minimum burden on the seller as compared to other Incoterms which require sellers to organize transportation, insurance etc.
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