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What is Ex Works (EXW) Incoterm? Know terms, benefits, and examples
EX Works Incoterm means the seller provides goods at their premises, while the buyer bears all transport, costs, and risks. Learn more about terms and duties in the blog.
In international trade, clear communication is key to ensuring smooth transactions. That’s where Incoterms come in – standardized rules by the International Chamber of Commerce (ICC) that define who is responsible for tasks like shipping, insurance, and customs clearance. Among these, the EX Works (EXW) Incoterm outlines that the buyer handles all logistics once goods are made available at the seller’s premises. In this blog post, learn the meaning of EXW Incoterm, its uses, benefits, examples, and the advantages and disadvantages associated with it.
What is EX Works (EXW) Incoterm?
EX Works (EXW) is a shipping term in international trade where the seller’s only responsibility is to make the goods available at their location (like a factory or warehouse). From that point on, the buyer takes care of everything — transportation, export paperwork, insurance, and all related costs in the export process. An EXW Incoterm assigns risk and responsibility to the buyer.1
Learn the term:
Incoterms
Incoterms or International Commercial Terms are a set of 11 standard rules or terms created by the International Chamber of Commerce (ICC) to clearly define the responsibilities of buyers and sellers in international trade. First introduced in 1936, these rules are updated regularly to match modern trade practices, with the latest version released in 2020.2
What are Ex Works shipping terms?
Under EXW, the seller's responsibility is to make the goods available at their premises (factory, warehouse, or shop) for the buyer. The goods are placed ready for loading, but the buyer is responsible for arranging transportation, including the contract with the carrier, and handling export clearance. EXW can apply to any mode of transport or a combination of transport methods. The seller must comply with security regulations but is not obligated to load the goods or handle export customs clearance; these responsibilities fall to the buyer. EXW places minimum obligation on the seller.3
EX Works Incoterm 2020 rule - Key changes and updates
Under Incoterms 2020, EXW requires the seller to only make the goods available at their own location — usually a factory or warehouse. They don’t have to load the goods or handle any transport. Once the items are ready for pickup, the buyer takes over all responsibilities, including export procedures and freight.
How does Ex Works (EXW) Incoterm work?
Under EXW Incoterm, the seller’s role is limited to making the goods available at their premises, ready for pickup. From that point, the buyer assumes full responsibility for loading, transportation, export and import procedures, and all associated costs and risks.4
However, EXW can be tricky in international trade. Some countries require a locally registered exporter, which the buyer may not be. Buyers may also face VAT/GST issues if the seller cannot prove the goods were exported. These factors make EXW less practical for cross-border shipments.5
However, EXW can be tricky in international trade. Some countries require a locally registered exporter, which the buyer may not be. Buyers may also face VAT/GST issues if the seller cannot prove the goods were exported. These factors make EXW less practical for cross-border shipments.5
Example of EX Works Incoterm
Typically, importers prefer EXW transactions when they can handle transportation arrangements cost-effectively. For example, if one supplier offers generators at $1,000 each with shipping included, and another offers them at $900 without shipping, the buyer may opt for the cheaper price and handle freight themselves. If they find a low-cost shipping option, EXW lets them save money by managing the logistics independently.
Exporter / seller obligations under EXW Incoterm
Under EXW, the seller has very limited duties, but each obligation still requires care to ensure the goods are properly prepared for the buyer. Responsibilities include:
Make the goods available at their premises
The seller must have the goods ready for pickup at their factory or warehouse and ensure they are accessible for the buyer’s carrier. Their responsibility ends once the goods are placed at the agreed location.
Pack and prepare the goods
The seller must pack the items suitably for transport, using appropriate materials and labelling to ensure safe handling during loading and transit.
Coordinate the pickup details
The seller needs to communicate the exact pickup point and agree on a collection time with the buyer, allowing smooth access for vehicles and loading teams.6
Importer / buyer obligations under EXW Incoterm
Importers bear various obligations under EXW Incoterms, some of which include:
● Loading the goods onto their vehicle at the seller’s premises and paying for transport from the seller’s premises to the port of origin.
● Paying all export customs fees required to move the goods out of the seller’s country.
● Loading the goods onto the main carriage arranged for international transport.
● Bearing all carriage or freight charges for transporting the goods to the destination country.
● Arranging and paying for insurance to protect the goods during transit.
● Handling all import customs duties, taxes, and clearance procedures.
● Covering any terminal charges at ports or airports along the route.
● Paying for delivery of the goods at the final destination.
● Unloading costs once the goods arrive.
● Transporting to port of origin.7
Documents required for EXW Incoterms
Some of the documents required for EXW ncoterms are:
● Commercial invoice: Commercial invoice is a detailed bill issued by the seller listing the goods, their value, and terms of sale. It serves as legal proof of the transaction and is critical for customs and payment processes.
● Packing list: Packing list describes how the goods are packed, including details like weight, dimensions, and the number of packages.
● Certificate of origin: Certificate of origin certifies the country where the goods were manufactured.
● Insurance certificate: Provides proof of insurance coverage during transit.
● Transport documents: These documents include the bill of lading (for sea freight), air waybill (for air freight), or CMR (for road transport).8
Advantages of EXW Incoterm
Some advantages of EXW Incoterms are as follows:
Minimal exporter responsibility:
Exporters face minimum risk and responsibility as they are only responsible for making goods available at their own premises. They do not have to bear the cost or responsibility of loading and shipping goods or paying insurance.
Access to domestic markets for importers:
EXW allows importers to purchase from markets where domestic sellers may not have export licenses.
Local pricing options:
Importers have the option to source products from local manufacturers at domestic market prices, gaining cost advantages.9
Disadvantages of EXW Incoterm
Some disadvantages of EXW Incoterms are as follows:
High responsibility:
The importer assumes all risks and costs, including export, transport, and import, unlike other Incoterms that share responsibilities between exporter and importer.
Complex logistics:
Managing the loading, delivery, and export process from a foreign country can be risky, and the importer may need local resources to resolve problems.
Unexpected costs:
Without a clear understanding of export processes, importers may face unforeseen expenses, making the initial cost savings less beneficial.10
When should you use an EXW agreement?
You should use an EXW agreement when you, as the seller, want the simplest and lowest-responsibility arrangement. It’s suitable if the seller prefers to hand over goods at their own location without handling loading, transport, or export formalities. EXW works best when the buyer is experienced and able to manage all logistics independently.11
Difference between EXW and FCA Incoterms
The key differences between EXW and FCA (Free Carrier) Incoterms are:
Aspect
EXW (Ex Works)
FCA (Free Carrier)
Used for
International trade where the buyer can handle pickup and export
International trade where seller manages export clearance and delivers to carrier
Responsibility
Seller makes goods available at their premises; buyer handles loading, transport, and export formalities
Seller delivers goods to buyer’s nominated carrier and completes export clearance
Risk transfer
When goods are made available to the buyer at the seller’s premises
When goods are handed over to the buyer’s nominated carrier
Importer control
High, buyer manages most of the process
Moderate, buyer gains control after goods are handed to carrier12
Delivery terms in EXW Incoterms
The delivery terms under EXW Incoterm are as follows:
● Delivery is considered complete when the seller makes the goods available at the agreed location, usually their own premises.
● Delivery happens once the seller notifies the buyer that the goods are ready, no physical handover is required.
● The seller is not required to load the goods onto the buyer’s vehicle.
● If the seller helps with loading, it is done entirely at the buyer’s cost and risk.
● The seller must clearly share the exact pickup point and any site access restrictions.
● Risk shifts to the buyer as soon as the goods are made available for collection.13
Cost involved in EXW Incoterm
Under EXW Incoterm, the costs involved are as follows:
● The seller pays all costs until the goods are made available for delivery.
● The buyer bears all costs from the point of delivery onward.
● The buyer must reimburse the seller for any costs incurred while assisting with transport, insurance, or customs formalities.
● The buyer is responsible for duties, taxes, export and import costs, and any related formalities.
● If the buyer fails to take delivery or does not provide proper notice, they must pay any additional costs resulting from the delay.14
Insurance of goods in EXW Incoterm
The following are the insurance terms under EXW Incoterm:
● The seller has no obligation to arrange insurance once the goods are delivered under EXW.
● If requested, the seller must provide any necessary information to help the buyer arrange insurance, at the buyer’s cost and risk.
● The seller may voluntarily obtain contingency insurance to protect against non-payment if goods are lost or damaged in transit.
● The buyer bears the risk of loss or damage from the point of delivery onward.
● The buyer is not required to insure the goods but may choose to do so for their own protection.15
Conclusion
EXW Incoterm is beneficial for sellers and provides flexibility of importing to buyers. It is used when the seller does not have the capacity to export, or when the importer is looking to procure multiple shipments from the same country. If you are an exporter looking for tailored guidance and support on how to export products via ecommerce, programs like Amazon Global Selling can help you grow your business globally.
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Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Frequently Asked Questions
1. Does EXW Incoterm include duties and taxes?
Yes, EXW Incoterm includes duties and taxes. In EXW Incoterm, the responsibility to take care of all taxes, import duties, and customs clearance is on the importer.
2. How to calculate EX Works costing?
Calculating EX Works costing involves totalling all the expenses that the importer must pay from the time the items are picked up from the importer’s location until they reach their destination.
3. Who handles the custom clearance procedure under EX Works?
The importer is responsible for customs clearance under the EXW Incoterms.
4. Who determines the place of delivery for EXW?
The place of delivery for EXW is determined by the seller or exporter. The seller is only required to make the goods available for the buyer and does not bear any transportation costs.
5. What is the difference between EXW and Delivery Duty Paid (DDP)?
EXW and DDP are types of commonly used Incoterms. In EXW, the seller only has to pack the goods and the buyer is responsible for most of the costs and risks. On the other hand, in Delivery Duty Paid (DDP) the seller takes care of almost everything, from packing and checking in the warehouse to delivery at final destination. This includes export and import charges as well. The buyer is responsible for the transportation charges from destination port to the final destination only.
6. Who pays freight on EXW?
The importer is responsible for all costs including freight under EXW Incoterms.
7. How does insurance work with EXW?
In EXW Incoterms, the insurance coverage for goods after they are ready for pickup is the responsibility of the buyer.
Published on November 29, 2022.
Updated on December 08, 2025.
Sources:
1. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
2. https://www.trade.gov/know-your-incoterms
3. https://guidedimports.com/blog/what-does-exw-mean-incoterms/
4. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
5. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
6. https://www.investopedia.com/terms/e/exw.asp
7. https://www.investopedia.com/terms/e/exw.asp
8. https://www.tradefinanceglobal.com/posts/ex-works-and-shipping-documents-whats-the-story/
9. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
10. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
11. https://academy.iccwbo.org/incoterms/article/incoterms-2020-exw-or-fca/
12. https://ekol.com.ua/en/exw-vs-fca-what-are-the-differences-and-who-bears-the-responsibility/
13. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
14. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
15. https://dclcorp.com/blog/shipping/ex-works-exw-incoterm/
Updated on December 08, 2025.
Sources:
1. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
2. https://www.trade.gov/know-your-incoterms
3. https://guidedimports.com/blog/what-does-exw-mean-incoterms/
4. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
5. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
6. https://www.investopedia.com/terms/e/exw.asp
7. https://www.investopedia.com/terms/e/exw.asp
8. https://www.tradefinanceglobal.com/posts/ex-works-and-shipping-documents-whats-the-story/
9. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
10. https://guidedimports.com/blog/what-does-exw-mean-Incoterms/
11. https://academy.iccwbo.org/incoterms/article/incoterms-2020-exw-or-fca/
12. https://ekol.com.ua/en/exw-vs-fca-what-are-the-differences-and-who-bears-the-responsibility/
13. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
14. https://www.tradefinanceglobal.com/incoterms/ex-works-exw/
15. https://dclcorp.com/blog/shipping/ex-works-exw-incoterm/
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