In international trade, EXW (Ex Works) is one of the most commonly used Incoterms, but it also carries the highest level of risk for the buyer. If your business is planning to import goods under EXW terms, clearly understanding its nature, responsibilities of each party, and operational procedures is essential to avoid unexpected costs.
Let’s explore EXW Incoterms 2020 in detail below!
1. What is EXW Incoterms 2020?
EXW stands for “Ex Works,” which means delivery at the seller’s premises (factory, warehouse, yard, etc.).
Under this term, the seller fulfills their delivery obligation when the goods are placed at the disposal of the buyer at the seller’s premises or another named place.
Key characteristics of EXW:
- It represents the minimum obligation for the seller and the maximum responsibility for the buyer.
- The buyer bears all costs and risks from the moment the goods are picked up at the seller’s location, including loading, export customs clearance, and international transportation.
- It is the only Incoterms condition where the buyer is responsible for export clearance.
2. Division of Responsibilities Between Seller and Buyer Under EXW
Seller’s Responsibilities
The seller’s obligations under EXW are minimal and include:
- Preparing goods: Provide goods in accordance with the contract, along with a Commercial Invoice and relevant documents.
- Packaging: Properly pack the goods for export to ensure safe transportation (unless otherwise agreed).
- Notification: Inform the buyer of the exact time and location for pickup.
- Document support: Assist the buyer (upon request and at the buyer’s cost) in obtaining export licenses or other necessary documents.
Important note:
The seller is NOT responsible for loading the goods onto the buyer’s transport vehicle and NOT responsible for export customs clearance.
Buyer’s Responsibilities
The buyer handles almost the entire supply chain:
- Loading: Bear costs and risks of loading goods onto the inland transport at the seller’s premises.
- Export customs clearance: Handle export procedures in the seller’s country and pay any applicable export duties/taxes.
- Transportation: Arrange inland transport in the export country, international shipping (sea/air), and inland transport in the import country.
- Insurance: Not mandatory, but strongly recommended since the buyer bears all risks from pickup.
- Import customs clearance: Handle import procedures and pay import duties/taxes at destination.
3. Import Process Under EXW Terms
For a Vietnamese company importing goods under EXW, the logistics process typically includes:
- Step 1: Sign the sales contract
Clearly agree on EXW terms, including the exact pickup location of the seller. - Step 2: Appoint a logistics provider
The importer works with a reliable freight forwarder/logistics company with agents in the exporting country. - Step 3: Pickup at seller’s premises
The overseas agent arranges a truck to collect and load the goods. - Step 4: Export customs clearance
The logistics agent handles all export documentation and customs procedures on behalf of the buyer. - Step 5: International transportation
Goods are transported to the port/airport and shipped to Vietnam. - Step 6: Import clearance & delivery
Upon arrival, the logistics provider completes import customs clearance, pays duties, and delivers goods to the buyer’s warehouse.
4. Advice When Using EXW Terms
Although EXW allows buyers to control actual logistics costs (avoiding inflated freight charges from sellers), it involves significant risks if you are unfamiliar with export regulations and procedures in the seller’s country.
You should only use EXW when:
- You have a strong international logistics partner with a global agent network capable of handling smooth door-to-door operations.
Comprehensive Logistics Solution with Songwin International Logistics Vietnam
Managing an entire supply chain from another country is not easy. At Songwin International Logistics Vietnam, we provide professional door-to-door logistics solutions, helping your business eliminate risks when importing under EXW terms.
With a strong global agent network, Songwin confidently handles:
- Pickup at the seller’s premises
- Export customs clearance overseas
- Safe international transportation
- Final delivery to your warehouse in Vietnam at optimal cost
Contact Us for Free Consultation!
SONGWIN INTERNATIONAL LOGISTICS VIETNAM CO., LTD
📍 Address: 344 Nguyen Trong Tuyen, Tan Son Hoa Ward, Ho Chi Minh City
📞 Hotline: 083.681.3969 - 0373.262.105
📧 Email: Sales2@songwinlog.com
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