What is EXW in Shipping? A Guide for Buyers and Sellers

Key Takeaways

• Under the EXW (Ex Works) Incoterm, the seller’s responsibility is limited to making goods available for collection at their own premises, such as a factory or warehouse.
• Risk and costs transfer from the seller to the buyer the moment the goods are packed and set aside at the designated loading dock.
• The buyer is responsible for every stage of the logistics journey, including loading the vehicle, managing export customs declarations, and paying all freight costs and import duties.
• Using EXW allows buyers to maintain complete control over their supply chain and negotiate shipping rates directly with their preferred logistics providers to avoid seller markups.
• A primary risk of EXW for international buyers is the legal requirement to clear goods for export, which may require a registered business entity or a specialized agent in the country of origin.

In the complex world of international logistics, Incoterms (International Commercial Terms) are the language that keeps global trade moving. Among the 11 defined terms, EXW (Ex Works) is often cited as the simplest for the seller, but it can be the most complicated for the buyer.

Whether you are a merchant looking to source goods from overseas or a seller trying to minimize your shipping liability, understanding what EXW is crucial before you sign any contract. In this guide, we will break down what Ex Works means, who is responsible for what, and why this term requires a trusted logistics partner to manage effectively.

What Does Ex Works Mean?

Ex Works (EXW) is an Incoterm in which the seller's responsibility is minimized to the absolute minimum. Under this term, the seller is only required to make the goods available at their premises (factory, warehouse, or plant) for the buyer to collect.

So, what does ex works delivery mean in practice? It means the seller does not load the goods onto the collecting vehicle nor clear them for export. Once the goods are packed and set aside at the seller's loading dock, the risk and cost transfer to the buyer immediately.

If you are the buyer, you bear the full burden of the journey. You must arrange the pickup, the export declaration in the country of origin, the freight, the import clearance, and the final delivery.

Responsibilities: Seller vs. Buyer

To truly understand EXW, it helps to look at the split of responsibilities. It is the most extreme "buyer-heavy" term in the Incoterms rules.

The Seller's Role

For the seller, EXW is the lowest-risk option. Their duties are limited to:

• Packaging: Ensuring the goods are packed safely for transport.
• Availability: Notifying the buyer when and where the goods are ready for collection.
• Assistance (Optional): Providing documents needed for export, but only at the buyer's risk and expense.

The Buyer's Role

If you are asking what EXW means for you as a buyer, the answer is "everything." You are responsible for:

• Loading: Getting the goods onto the truck at the seller's factory.
• Export Customs: Clearing the goods for export (which can be tricky if the seller does not provide an export license).
• Transport: Arranging inland freight to the port, ocean/air freight, and final delivery.
• Import Duties: Paying all tariffs and taxes at the destination.
• Insurance: Covering the goods from the moment they are available at the factory.

Why Choose EXW? The Pros and Cons

If EXW places so much burden on the buyer, why is it used?

The Benefits

For buyers, the main advantage is control. When you buy on terms such as CIF or DAP, the seller selects the freight forwarder and often adds a markup to the shipping cost. With EXW, you choose the logistics provider, allowing you to negotiate better rates and have complete visibility into the shipment. If you have a strong logistics network, EXW can often be the cheapest way to source products.

The Risks

The primary risk is Export Clearance. Since the seller is not obliged to clear the goods for export, you (the buyer) must do it. However, in many jurisdictions, only a registered entity within that country can file an export declaration. If you do not have a presence in the seller's country, you might find yourself stuck. This is where partnering with a global expert is vital. As we discuss in our broader guide on what are Incoterms, choosing the wrong term can lead to unexpected compliance hurdles.

Is EXW Right for E-commerce?

In the B2C e-commerce, what is exworks usually used for? Rarely for the final customer. You would never ask an online shopper to arrange a truck to pick up a t-shirt from your warehouse.

However, EXW is ubiquitous in B2B sourcing. If you are an online retailer sourcing inventory from a manufacturer in China or Vietnam, buying Ex Works allows you to consolidate shipments from multiple factories into a single container, saving significant freight costs.

Summary: Navigate EXW with Confidence

What does ex-works mean for your business? It means opportunity for cost savings, but only if you have the logistics infrastructure to handle the workload.

Because the buyer assumes all risks from the factory floor, having a partner who can act as your "eyes and ears" on the ground is essential. At Landmark Global, we help businesses navigate these complex terms. Whether you need help understanding what an Importer of Record is or need a freight solution to pick up your EXW goods, we ensure that "maximum responsibility" doesn't mean "maximum stress."