What an EXW (Ex Works) price covers, and what it leaves to you

Who does what under an EXW price

An EXW quote is the seller's price for goods ready to collect. The rule places the minimum obligation on the seller in terms of risks and costs^[2], so everything that moves the goods is on you. An FOB price covers more: under FOB the seller is responsible for completing the export clearance at the port of shipment^[3] and delivers once the goods are loaded onto the vessel at the named port of shipment^[3]. The EXW vs FOB comparison prices one order both ways and compares the two landed in the US.

The two traps: loading and export clearance

Under EXW the seller delivers the goods by making them available to the buyer, ready for loading onto the collecting vehicle arranged by the buyer^[2]. The goods are placed, not loaded. The seller may well load your truck anyway. If cartons are damaged while it does, the loss can still be yours: an ICC Academy guide says loading onto the buyer's vehicle is done at the buyer's expense and risk^[2], even when you had no hand in it. A buyer who wants the seller to carry that risk should ask for FCA instead, under which a seller delivering at its own premises must load the goods.

Export clearance is the second trap. It is your job under EXW, even though the seller is the party based in the exporting country. ICC Academy's guide comparing EXW and DDP advises a buyer who expects difficulty to choose FCA, where the obligation and cost of export clearance sit with the seller, and its guide comparing EXW and FCA notes that EXW is most safely used for domestic sales^[2], where nothing crosses a border.

When an EXW quote still works

EXW is workable when your freight forwarder has an office or agent near the factory and can collect, clear and ship the goods for a known fee. If not, ask the seller for an FCA or FOB price and compare the difference with what your forwarder charges for pickup and export clearance. For a US import, the FOB quote is the cheaper one if the difference, plus the duty on it, comes to less than those origin charges.

EXW and the value you pay duty on

For goods entering the United States, the value that duty is charged on excludes international freight and insurance^[4], and when the price is ex-factory, the foreign inland freight is not added to it^[5]. So the freight you pay on top of an EXW price does not raise your US duty. The European Union works the other way: its customs value includes transport and insurance up to the point where the goods enter the EU^[6], so an EU importer pays duty on the freight to the border as well.

An EXW quote landed in the US

Line	Amount
EXW price, 2,000 units at $4.00	$8,000
Pickup, loading and export clearance through your forwarder	$440
Ocean freight and insurance to the US port	$930
Value for US duty (the EXW price)	$8,000
Duty at 10% (assumed)	$800
Port, customs fees, broker and delivery at destination	$510
Landed cost	$10,680
Landed cost per unit	$5.34

Illustrative figures, not a quote. Real prices depend on the spec, quantity and factory.

An EXW price usually looks lower than an FOB price from the same factory, because it leaves out the origin charges; once you add them, the landed cost can come out level. Compare EXW quotes with the other Incoterms on landed cost per unit, never on the unit price alone. Ask every manufacturer to name its rule and named place on the quote, so you can see which costs sit outside its price. Better still, name one rule in your request for quotation and ask each one to quote on it.