EXW, or Ex Works, is the Incoterms rule where the seller does the least. Under the ICC Incoterms 2020 rules, the seller delivers when it places the goods at the buyer's disposal at its premises or another named place, not loaded on any collecting vehicle and not cleared for export. From that point, the buyer bears the costs and risks of loading, transport, export and import formalities and everything else needed to get the goods to their destination.

Costs that move to you

With an EXW quote, you or your forwarder typically pay for loading at the factory, inland transport to the port or airport, export customs clearance, terminal handling at origin, the main carriage, insurance if you want it, and all import costs. With an FOB quote, by contrast, the seller handles export clearance and delivers the goods on board the vessel at the named port of shipment. Ask your forwarder to quote the extra origin costs so you can compare like with like.

Export clearance can be a problem

Under EXW, the buyer is responsible for export clearance, but in many countries a foreign buyer cannot easily act as exporter. In practice, the factory often still handles the export paperwork. If that is the plan, the Incoterms rule does not match what is actually happening. The ICC notes on the rules suggest FCA where the seller loads the goods and clears them for export. Agree the rule that reflects what each side will really do.

Containers and FOB

If you change to FOB, note that the ICC explanatory notes say FOB may be unsuitable for goods handed to the carrier before they are on board, as typically happens with containers, and that FCA is usually the better choice there.

Inspect before risk passes

Under EXW, risk passes to you at the factory. Schedule the final inspection, sampled under a plan such as ISO 2859-1, before the goods are collected, and link the balance payment to it.

Write the chosen rule with the named place and the Incoterms 2020 version into the purchase order, for example FCA with the factory address, so both sides know exactly where delivery happens.