EXW (Ex Works)
EXW is the delivery term with the lowest seller responsibility in Incoterms 2020: the seller makes the goods ready at its own address and the buyer handles everything after that. It works for any transport mode, but because export clearance falls on the buyer it often causes friction in cross-border deals.
EXW (Ex Works) is the Incoterm under which the seller only makes the goods available at its own premises (factory, warehouse) without even loading them; risk and cost pass to the buyer from that point, making it the lightest term for the seller and the heaviest for the buyer.
Where risk and cost transfer
EXW has a single transfer point: the seller's named premises (factory or warehouse). The moment the goods are placed at the buyer's disposal there on the agreed date, both risk and cost pass to the buyer. The seller is not even obliged to load the goods onto the collecting vehicle.
- Risk transfer: at the seller's premises, when goods are placed at the buyer's disposal
- Cost transfer: at the same point; loading, carriage, insurance and customs costs are all on the buyer
- Loading: the seller does not load; the buyer must arrange loading onto its vehicle (even if loading is physically done with the seller's resources, the risk stays with the buyer)
- Export and import clearance: both are the buyer's responsibility
When it is used
EXW fits situations where the seller wants no involvement in transport or customs and the buyer is strong enough to run its own logistics.
- Deals that work like a domestic sale, where the buyer collects from the premises with its own carrier
- Cases where the buyer has an agent, its own carrier or a customs broker in the seller's country
- Samples, small shipments, or quotes where an 'ex factory' price needs to be seen cleanly as a reference
- Early-stage deals where the seller has no logistics capacity and wants to leave risk and operations entirely to the buyer
What to watch for / common mistakes
EXW looks easy for the seller on paper, but it is the most frequently misused term in cross-border trade.
- The export-clearance trap: in most countries a foreign buyer cannot file the export declaration in its own name; even though it formally belongs to the buyer, the seller often has to do it in practice. For exports the ICC recommends FCA instead of EXW
- Proof of export: if the export record is in the buyer's name, the seller may not get the evidence it needs for VAT exemption and the export declaration
- Loading ambiguity: the 'seller does not load' rule causes friction in practice; if damage occurs during loading the risk is on the buyer, so spell this out in the contract
- Price comparison: the EXW price looks lowest because carriage and customs are excluded; the buyer must separately calculate the landed cost
How it relates to Sighthem
In Sighthem the Incoterm is selected at the quote and proforma stage; as a delivery term it is written into the order's commercial terms.
- The delivery term (including EXW) is filled in on the proforma/quote and carried over to the commercial invoice
- When EXW is chosen, transport and customs sit with the buyer, so the document set tracked on the seller's side is leaner at shipment
- If the seller in fact handles export clearance, the related documents (declaration, certificate of origin, packing list) are kept in Sighthem's shipment document set
- Choosing the Incoterm on the proforma keeps it consistent with payment/L/C terms; the delivery term on the quote and the wording on the documents must match
Frequently Asked Questions
Why is EXW the lowest-responsibility term for the seller?
Because the seller's only obligation is to place the goods at the buyer's disposal at its own premises. Loading, carriage, insurance, export and import clearance are all on the buyer, and risk passes to the buyer at that point.
What is the difference between EXW and FCA?
Under EXW the seller does not load and export clearance is the buyer's responsibility. Under FCA the seller hands the goods to the buyer's carrier and the seller handles export clearance. Since a foreign buyer cannot usually file the export declaration, the ICC recommends FCA instead of EXW for cross-border trade.
Who handles export clearance under EXW?
As a rule, the buyer. But because customs law in most countries requires a domestic party to file the export declaration, in practice the seller may have to do it on the buyer's behalf. This creates risk for the seller in terms of VAT exemption and proof of export.
Can EXW be used for any mode of transport?
Yes. EXW can be used for any mode of transport (road, sea, air, rail, multimodal), because the delivery point is the seller's land premises and it carries no sea-specific condition such as loading onto a ship.
Get the Incoterm right from the start: set the delivery term on your quote and proforma in Sighthem, and keep it consistent with the commercial invoice and shipment document set.
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