Learn what EXW (Ex Works) means in international trade. Discover the seller’s and buyer’s obligations, delivery terms, and how risks and costs are allocated under EXW Incoterms 2020.

What Is EXW (Ex Works)?

EXW (Ex Works) is one of the most basic Incoterms in international trade, first introduced in 1936. Under EXW, the seller fulfills their obligation when they place the goods at the buyer’s disposal at their premises (factory, warehouse, etc.) or another named location.

• Buyer bears all costs and risks from that point forward.
• Seller is not required to load the goods or clear them for export.

Best Use Case:
EXW is ideal for domestic transactions or within a customs union, where buyers manage all logistics and export formalities.

Key Features of EXW Incoterms 2020

1. General Obligations

The seller must:

• Provide goods in conformity with the sales contract
• Issue a commercial invoice
• Supply other documentation (e.g., Packing List, Certificate of Origin)

2. Delivery Terms under EXW

• Seller does NOT load the goods.
• Delivery is completed when goods are made available in a deliverable state at the designated location.

✅ Conditions for Deliverable State:

Goods must be identified to the contract:

• Labeled or marked
• Shipping documents issued
• Buyer notified

✅ Delivery Location:

• At seller’s premises or agreed location
• If not specified, seller may choose the most convenient point (per A2 rule)

✅ Delivery Time:

• Can be a specific date or a period
• Risk transfers to buyer once goods are placed at their disposal

3. Risk Transfer Under EXW

Buyers assume full risk (including price, insurance, commercial, political) from the moment of delivery.

Key Rules:

• CISG Article 66–69: Buyer still must pay if goods are lost or damaged after risk transfers
• Incoterms A3: Risk = “All loss or damage to the goods”
• If buyer delays or fails to collect goods, risk still transfers after the agreed time

Important:
Risk transfers only when:

• Goods are clearly identified to the contract
• Delivery time has arrived
• Delivery location is determined

4. Insurance Responsibilities

• EXW places no obligation on the seller to insure the goods.
• Buyers are advised to arrange coverage themselves.
• For warehouse-to-warehouse insurance terms, refer to related Incoterms.

5. Cost Responsibilities (Simplified)

• Seller: Only responsible for making goods available
• Buyer: Assumes all transportation, export, import, and insurance costs

EXW vs FCA: Which Is Better?

Feature	EXW	FCA (Free Carrier)
Seller loads goods	❌ No	✅ Yes
Seller clears export	❌ No	✅ Yes
Buyer effort	�� High	�� Lower
Use case	Domestic or customs union	International transactions

Recommendation:
If the buyer needs the seller to handle loading and export clearance, FCA is a more practical choice.

EXW (Ex Works) is a minimalist term under Incoterms 2020, shifting nearly all responsibility to the buyer. It’s best suited for local or intra-union deals where the buyer controls the full supply chain.

If you’re unsure whether EXW, FCA, FOB, or another term suits your shipment, contact our LVFU international trade consultants today.