You've received a quote from a new supplier, and one line item makes you do a double-take: the price. It's significantly lower than other offers. The shipping term listed is EXW, or Ex Works. It seems like you've found the perfect deal.
But in logistics, the cheapest initial price can often become the most expensive mistake.
Ex Works puts nearly all responsibility on you, the buyer. While it offers maximum control, it also carries hidden complexities and costs that can quickly erase your initial savings.
What is EXW in Shipping?
EXW (Ex Works) is one of the 11 Incoterms® set by the International Chamber of Commerce. Under EXW, the seller's only obligation is to make the goods available for pickup at their own premises.
From that moment forward, the buyer is responsible for everything:
- Loading the goods onto the truck
- Arranging transport from the seller's location
- Handling all export documentation and clearing customs in the origin country
- Managing the main international freight journey
- Handling import customs clearance in the destination country
- Arranging final delivery
The Critical Point of Risk Transfer
Risk transfers the moment the goods are made available for pickup—not when loaded onto the truck. If the buyer's truck is late and goods are damaged on the seller's dock, it's the buyer's loss.
Buyer vs. Seller Responsibilities
| Responsibility | Seller | Buyer |
|---|---|---|
| Packaging | ✓ | |
| Loading at Origin | ✓ | |
| Export Licenses & Docs | Must assist | ✓ |
| Export Customs | ✓ | |
| Origin Terminal Charges | ✓ | |
| Main Freight Carriage | ✓ | |
| Insurance | ✓ (Optional but recommended) | |
| Destination Charges | ✓ | |
| Import Customs | ✓ | |
| Final Delivery | ✓ |
3 Common EXW Myths That Create Costly Problems
Myth 1: The seller will help load the cargo.
While many sellers assist with loading, they are not obligated to do so. The buyer bears all risk during loading.
Myth 2: EXW is the cheapest option for the buyer.
The initial product price is low because it includes no shipping costs. But the buyer must pay for trucking, terminal handling, customs brokerage, and all export documentation—which can add up to more than FOB.
Myth 3: The seller has zero liability after pickup.
While operational responsibility ends, legal liability may not. Authorities can still hold sellers accountable for export control regulations.
How Modern Freight Forwarders Manage EXW Complexity
A modern cloud freight forwarding platform provides:
- Centralized Document Handling for the massive paper trail
- Total Cost Visibility to track every charge
- Real-Time Client Updates via customer portal
- Operational Automation for faster, more accurate processing
Frequently Asked Questions
Who pays for freight in EXW shipping?
The buyer pays for all freight costs from the seller's location to the final destination.
What is the main difference between EXW vs. FOB?
Under EXW, the buyer handles everything from the seller's door. Under FOB, the seller delivers goods to the vessel and handles export customs.
What are the advantages of Ex Works?
Full control over the entire supply chain and ability to consolidate cargo from multiple suppliers.
What are the disadvantages of Ex Works?
High responsibility, risk of managing logistics in a foreign country, and potential for hidden costs.
The Final Word: Use EXW with a Clear Strategy
Before agreeing to EXW terms, ask yourself: Do I have a trusted partner on the ground to manage loading, transport, and customs? If the answer is no, you may be better served by FOB.
