Delivery on EXW Terms

International trade requires strict fulfillment of obligations by both parties to the foreign economic contract. These obligations are governed by the globally accepted Incoterms rules. One of the frequently used terms is EXW (Ex Works). The literal meaning of this term in English is "from the factory."

What are EXW Delivery Terms

This is a basic trade term under which the seller fulfills their obligations for the delivery of goods at the moment they are ready at the enterprise or warehouse. The bulk of the obligations are transferred to the buyer, who assumes responsibility for the product received from the manufacturer throughout its journey to the final destination.

Thus, EXW are delivery terms that minimize the obligations of the seller, the manufacturer, and maximize the responsibility of the buyer, the customer.

Features of Delivery Under EXW Terms

1. Documentation. Under EXW terms, the seller only provides the goods and the necessary documents confirming readiness for shipment.
2. Transportation. Customs clearance and the delivery of goods from China to Ukraine or in any other direction is entirely the responsibility of the recipient.
3. The possibility for the parties to choose one of two schemes: ex-works (the enterprise where the finished product is made available to the buyer) or ex-warehouse (the place where, by agreement between the parties, the seller is obliged to deliver the goods). In the first case, the buyer picks up the batch of goods from the production site, in the second – from the supplier's warehouse.

Responsibilities of the Parties Under EXW Rules

The implementation of EXW Incoterms conditions implies the following distribution of responsibilities.

Seller:

• preparation and packaging of the product in such a way that it is ready for export;
• providing the product at the buyer's disposal at the seller's enterprise or warehouse;
• informing the recipient about the readiness of the batch for shipment;
• ensuring the buyer's access to the product, i.e., placing it in a convenient location for shipment.

For the buyer, EXW delivery terms imply taking responsibility from the moment the seller notifies them that the goods are ready for shipment. Their obligations include:

• loading the goods onto their own or rented transport; 
• organizing and paying for the transportation of the goods from the factory/warehouse to the final destination, with independent selection of the type of transport and carrier; 
• arranging the necessary licenses, certificates, and permits; 
• cargo insurance (an optional element under EXW terms); 
• customs clearance for both export and import, with the proper documentation package; 
• paying all costs associated with customs procedures (duties, taxes, excise duties, fees), covering the costs of customs brokerage services or other logistics intermediaries;
• unloading at the destination.

Advantages and Disadvantages of EXW Terms

It is obvious that EXW delivery is the most convenient for the manufacturer or seller. For the buyer, it has a number of pros and cons.

Advantages:

1. Maximum buyer control. From the moment the goods are received, the buyer independently determines the transportation conditions, which allows them to choose the optimal route, a convenient carrier, and the type of transport, potentially reducing costs.
2. Simplicity of the deal. EXW Incoterms clearly delineate the responsibilities of the parties, so reaching an agreement can be quick.
3. The ability for the buyer to purchase goods from several suppliers and consolidate them into one shipment to optimize transportation and customs clearance costs.

Disadvantages:

1. The buyer's maximum risks arise from the moment of accepting the goods.
2. Coordination difficulties. The recipient must organize all stages of transportation, which can be challenging and costly. However, professional logistics companies can assist with this.

Profitable Supplies on EXW Terms from DiFFreight Company

We guarantee strict adherence to EXW terms while ensuring a high level of service for each client. The professional international logistics services provided by DiFFreight include:

• experience and professionalism. Our qualified and competent specialists effectively organize the logistics process with strict compliance with Incoterms rules; 
• comprehensive solutions. DiFFreight offers services for organizing transportation, insurance, and customs documentation;
• individual approach with a focus on business needs and client requests;
• optimization of expenses. We set competitive rates for our services, as well as offer the most advantageous solutions, which helps reduce the EXW cost.

DiFFreight is aimed at long-term cooperation, so it strives to create comfortable conditions for its clients and make their logistics activities as efficient as possible.