EXW (Ex Works) is the Incoterm where the seller's obligation ends when goods are made available at the seller's premises, and every cost, risk, and formality after that point belongs to the buyer. Ex Works is one of the 11 rules published by the International Chamber of Commerce under Incoterms 2020, which remains the current version in 2026 and stays in force until Incoterms 2030 publishes. This guide covers what EXW covers, what the Ex Works price actually includes (with a full $10,000 landed cost breakdown), where risk transfers, how EXW compares with FOB on a single table, and the export clearance trap that makes EXW risky for cross border trade.
Key Takeaways
Definition
EXW (Ex Works) is an Incoterms 2020 rule in which the seller fulfills their obligation by placing the goods at the disposal of the buyer at the seller's premises or another named place (works, factory, warehouse), not cleared for export and not loaded on any collecting vehicle. Risk and all costs from that point onward belong to the buyer. Applies to any mode of transport.
EXW is the Incoterm quoted most often by suppliers who want a clean, low commitment sale, and misunderstood most often by buyers who see a low unit price and assume that price lands the goods at their warehouse. It does not. Under Ex Works the buyer takes on the loading at origin, the inland move to the port, the export clearance, the main carriage, the insurance, the destination clearance, and the last mile delivery. That is why the Ex Works price is always the lowest quoted price in a bid, and almost always the most expensive one after the full landed cost is added. Below we cover the exact split, a worked $10,000 landed cost example, the risk transfer point, and the three cases where EXW is the right choice against the many more where it is not.
EXW (Ex Works) is one of the 11 Incoterms 2020 rules. In shipping, EXW means the seller's responsibility ends when the goods are made available to the buyer at the seller's premises, properly packed, at the agreed date. The seller does not load the goods on the buyer's collecting vehicle unless the contract specifies otherwise (see "EXW Loaded" below). From that moment the buyer bears the risk and cost of loading, inland transport, export clearance, main carriage, insurance, import clearance, and destination delivery.
Written in full on contracts: EXW [Named Place]. Example: "EXW Shenzhen Factory, Incoterms 2020" means the seller places the goods at the buyer's disposal at the Shenzhen factory, and risk transfers to the buyer at that point.
Unlike FOB, which is sea and inland waterway only, EXW works for any mode: air, road, rail, sea, or multimodal. That is because the transfer point is the seller's premises, not a vessel. In practice EXW is most common on:
The default Ex Works rule places the goods at the buyer's disposal at the seller's premises but does NOT require the seller to load them onto the buyer's collecting vehicle. If the buyer wants the seller to load the truck (because the seller has the forklift, the dock, and the trained crew), the contract must state "EXW Loaded" or "EXW Loaded, Incoterms 2020". Without that wording, if the seller loads and damages the goods during loading, the argument over whose insurance responds becomes a legal question, not a contractual one.
The Ex Works price is the seller's factory gate price for the goods only. It excludes every downstream cost: loading, inland transport to the port, export clearance, main carriage, insurance, import duty, and destination delivery. That is why an Ex Works quote always looks cheaper than an FOB, CIF, or DDP quote from the same supplier. It is not cheaper; it is simply narrower.
Below is a real world landed cost breakdown for a US importer buying 1,000 units of electronics from Shenzhen, China, at $10 per unit, under EXW Shenzhen Factory terms. The Ex Works price is $10,000. The full landed cost at the buyer's Los Angeles warehouse is approximately $16,304.
| Line Item | Cost (USD) | Who Pays Under EXW |
|---|---|---|
| Ex Works unit price (1,000 units at $10) | $10,000.00 | Buyer pays supplier |
| Export packaging (heat treated pallets, marking) | $150.00 | Buyer |
| Loading at Shenzhen factory (forklift + labor) | $80.00 | Buyer |
| Inland trucking factory to Shenzhen port (200 km) | $350.00 | Buyer |
| Chinese export clearance and EEI filing | $250.00 | Buyer |
| Origin terminal handling (Shenzhen) | $450.00 | Buyer |
| Ocean freight Shenzhen to Los Angeles (40ft container) | $3,000.00 | Buyer |
| Marine insurance (0.4 percent of $13,000 goods + freight) | $52.00 | Buyer |
| ISF filing (10 plus 2 rule, US imports) | $50.00 | Buyer |
| ISF bond (single transaction) | $75.00 | Buyer |
| US customs entry filing | $200.00 | Buyer |
| Import duty (7.5 percent on $10,000 goods value) | $750.00 | Buyer |
| Merchandise Processing Fee (MPF, 0.3464 percent) | $34.64 | Buyer |
| Harbor Maintenance Fee (HMF, 0.125 percent) | $12.50 | Buyer |
| Los Angeles port drayage to warehouse (50 miles) | $850.00 | Buyer |
| Total landed cost | $16,304.14 | Buyer bears 100 percent |
Landed cost per unit: $16.30. That is a 63 percent uplift on the $10 Ex Works unit price. Any importer benchmarking against an FOB or CIF quote from the same supplier is not comparing like for like unless they add the origin side costs (loading, inland trucking, export clearance, terminal handling) that the FOB or CIF price already includes.
Three reasons the Ex Works price undersells the true cost:
Buyers who want the seller to handle origin export formalities should quote FCA (Free Carrier) instead, or ask the seller to price FOB or CIF.
Under EXW, risk transfers from seller to buyer the moment the goods are made available at the seller's premises. Before that moment the seller bears the risk. After the goods are placed at the buyer's disposal (whether or not the buyer has physically collected them yet), the buyer bears every risk of loss, damage, and delay for the entire remaining journey.
Textual diagram of the EXW risk transfer point:
[Risk transfers here]
|
v
[Seller factory] -> [Loading dock] -> [Buyer's truck] -> [Origin port] -> [Vessel] -> [Destination port] -> [Buyer warehouse]
(seller bears risk) <-- 100 percent buyer risk from this point onward -->
Worked example: A US importer buys 1,000 units of electronics from Shenzhen under EXW Shenzhen Factory terms. Collection is scheduled for Monday 9 am at the Shenzhen factory. A fire breaks out at the factory Sunday night and destroys the pallets. Because the goods had already been "made available" at the seller's disposal on Friday (as agreed in the contract), risk had already transferred to the buyer. The buyer files the marine insurance claim; the seller has no obligation to refund the purchase price. If the buyer failed to purchase insurance covering the goods while in the seller's warehouse pending collection, the buyer absorbs the loss.
This is the single biggest EXW trap for first time importers, and the reason experienced buyers either extend the marine cargo policy to "warehouse to warehouse" (Institute Cargo Clauses A, which covers the seller's premises while awaiting collection) or push the seller to quote FCA instead so risk transfers only at the moment of collection by the buyer's carrier.
Watch out: The export clearance trap
Under EXW the buyer is contractually responsible for export clearance in the seller's country. In practice, foreign buyers rarely have the standing, the tax ID, or the local export license to file that clearance. Chinese customs, for example, requires a locally registered exporter of record; a US buyer cannot file EEI equivalent declarations at Shenzhen customs without a local partner. The ICC has flagged this since Incoterms 2010 and recommends FCA (Free Carrier) for any cross border EXW scenario, because FCA keeps export clearance with the seller.
| Cost or Responsibility | Seller | Buyer |
|---|---|---|
| Export packaging (default level) | Yes | |
| Goods available at named place at agreed date | Yes | |
| Loading on collecting vehicle | Yes (unless "EXW Loaded") | |
| Inland transport to origin port | Yes | |
| Export clearance and licenses | Yes | |
| Origin terminal handling | Yes | |
| Main carriage (ocean, air, road, rail) | Yes | |
| Marine or cargo insurance | Yes (buyer's choice) | |
| ISF filing (US imports) | Yes | |
| Import clearance and duties | Yes | |
| Destination terminal handling | Yes | |
| Inland transport at destination | Yes | |
| Unloading at buyer's warehouse | Yes |
The two Incoterms buyers weigh against each other most often are EXW and FOB. Both leave main carriage and insurance to the buyer, but they draw the seller's responsibility line in very different places. This table sits them side by side.
| Aspect | EXW (Ex Works) | FOB (Free On Board) |
|---|---|---|
| Modes | Any mode | Sea and inland waterway only |
| Seller's obligation ends | At seller's premises | On board vessel at named port of shipment |
| Loading on collecting vehicle | Buyer (unless "EXW Loaded") | Seller (loads onto vessel) |
| Inland transport to origin port | Buyer | Seller |
| Export clearance | Buyer | Seller |
| Origin terminal handling | Buyer | Seller |
| Main carriage | Buyer | Buyer |
| Marine insurance | Buyer (optional) | Buyer (optional) |
| Risk transfer point | Seller's premises | On board vessel at origin port |
| Best for | Domestic sales, or buyer with strong origin footprint | Ocean imports where buyer has carrier contracts |
| ICC recommendation | Avoid for cross border; use FCA | Avoid for containerized cargo; use FCA |
For a full comparison of FOB against the other 10 Incoterms, see our complete guide to FOB in shipping.
When the buyer is choosing among the four Incoterms most commonly quoted on international purchase orders, the differences are best read on a single table.
| Aspect | EXW | FOB | CIF | DDP |
|---|---|---|---|---|
| Modes | Any | Sea only | Sea only | Any |
| Seller's obligation ends | Seller's premises | On board vessel at origin | On board vessel at origin | Buyer's premises (duty paid) |
| Export clearance | Buyer | Seller | Seller | Seller |
| Main carriage | Buyer | Buyer | Seller | Seller |
| Insurance | Buyer (optional) | Buyer (optional) | Seller (mandatory minimum ICC Clauses C) | Seller (optional) |
| Import clearance and duties | Buyer | Buyer | Buyer | Seller |
| Destination delivery | Buyer | Buyer | Buyer | Seller |
| Buyer's total workload | Highest | High | Medium | Lowest |
| Seller's price includes | Goods only | Goods plus origin costs | Goods plus origin plus freight plus insurance | Everything to buyer's door, duty paid |
The EXW to DDP axis is the same rule set (Incoterms 2020) drawn across a workload spectrum. EXW puts the whole burden on the buyer; DDP puts it on the seller. FOB and CIF split the burden at the vessel rail with different insurance treatment. Choose based on which party has the stronger origin footprint, the stronger destination footprint, and the risk appetite for main carriage.
Myth 1: "EXW is the cheapest way to buy from overseas."
The Ex Works unit price is the cheapest number on the quote. The landed cost is often higher than the same supplier's FOB or CIF quote, because the buyer's forwarder marks up origin costs the seller could have booked directly. In the $10,000 worked example above, EXW landed at $16,304. The same order quoted CIF Los Angeles from the same supplier would typically land at $14,000 to $15,000.
Myth 2: "Under EXW, the seller handles export clearance."
No. Under Ex Works, the buyer is contractually responsible for export clearance in the seller's country. In many jurisdictions (China, India, Vietnam, most of the EU), a foreign buyer cannot legally file that clearance without a local exporter of record. The buyer either arranges a local export clearance service (an added cost line) or accepts that the shipment will not leave the origin country without an ad hoc workaround.
Myth 3: "EXW risk transfers when the buyer's truck arrives at the seller's dock."
No. EXW risk transfers when the goods are made available at the seller's disposal at the agreed date, whether or not the buyer has physically arrived to collect them. If the goods sit at the seller's warehouse for a week awaiting collection and are damaged during that week, the buyer's insurance responds, not the seller's. This is the single biggest EXW trap for first time importers.
EXW is a reasonable choice when:
EXW is NOT recommended when:
Software that manages Incoterm rules on every shipment record, like our Ocean Freight Management Software, tags the Incoterm on the shipment file, validates that the mode matches the rule (EXW is any mode, FOB is sea only), and holds the buyer or seller side cost split so quotes reflect the true landed cost.
When a US importer signs EXW terms with a foreign supplier, the forwarder builds the buyer side quote from the seller's factory gate onward. Every EXW quote we write for a cross border shipment lands somewhere between 8 and 14 line items on the origin side alone. Here is the standard origin side breakdown for the Shenzhen to Los Angeles example above:
| Origin Side Line Item | Typical Cost (40ft container) | Who It Goes To |
|---|---|---|
| Loading at seller's factory | $50 to $150 | Seller (paid by buyer) or local forwarder |
| Inland trucking factory to port | $250 to $500 (depends on distance) | Local trucking company |
| Export packaging beyond default | $100 to $300 (heat treated pallets, ISPM 15) | Local packer |
| Chinese export clearance / EEI filing | $150 to $350 | Local customs broker |
| Origin terminal handling (Shenzhen) | $350 to $550 | Terminal operator |
| Documentation (BL, packing list, CO) | $50 to $150 | Forwarder |
| Origin agent handling fee | $75 to $200 | Foreign forwarder |
Every line item above is the buyer's cost under EXW Shenzhen. On an FOB Shenzhen quote from the same supplier, all seven roll into the seller's FOB price and the buyer never sees them broken out. That is why an FOB quote from the same supplier often lands within 5 to 10 percent of the true EXW landed cost, despite looking higher on paper.
The four recurring mistakes on EXW import quotes:
Modern quoting tools like our Rate Management Software for Forwarders generate the full EXW buyer side quote from a single shipment record, pulling origin trucking, export clearance, terminal handling, and destination costs into one landed cost view. The customs entry piece at destination is handled inside the same workflow through our Customs Management Software for Forwarders, so the ISF number, the entry summary, and the duty payment reconcile against the same shipment file the operations team uses.
Nothing changed to the EXW rule in 2026. Here is why searchers keep asking:
Practical implication for a 2026 contract: writing "EXW Shenzhen Factory, Incoterms 2020" on a purchase order is correct and enforceable. Writing "EXW Shenzhen, Incoterms 2026" is not, because no such Incoterms version exists.
EXW stands for Ex Works. It is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce. Under EXW, the seller's only obligation is to make the goods available at their premises, properly packed, at the agreed date. From that point every cost and risk (loading, inland transport, export clearance, main carriage, insurance, import formalities, and destination delivery) belongs to the buyer. EXW is the most buyer heavy of the 11 Incoterms.
The Ex Works price is the seller's factory gate price for the goods only. It excludes loading, inland transport to the origin port, export clearance, main carriage, insurance, import duty, and destination delivery. On an EXW quote at $10,000 for 1,000 units, that $10,000 is the goods price. The full landed cost at a US warehouse (adding origin costs, ocean freight, insurance, duties, and last mile drayage) typically runs $16,000 to $18,000 on a 40ft container from Asia. The Ex Works price is always the lowest number on a bid because it is the narrowest.
Risk transfers when the goods are made available at the seller's premises at the agreed date, whether or not the buyer has physically arrived to collect them. If the goods sit at the seller's warehouse for a week awaiting collection and are damaged during that week, the buyer's insurance responds, not the seller's. This is the biggest EXW trap for first time importers and the reason experienced buyers extend their marine cargo policy to cover "warehouse to warehouse" from the seller's premises.
The buyer pays for everything after the goods are made available at the seller's premises: loading on the collecting vehicle, inland transport to the origin port, export clearance, main carriage (ocean, air, road, or rail), insurance, import clearance, duties, destination terminal handling, and last mile delivery. The seller pays only for making the goods available at the agreed place and date, properly packed.
No. Under EXW the buyer is contractually responsible for export clearance in the seller's country. This is often impossible in practice because a foreign buyer usually cannot legally file export clearance without a locally registered exporter of record. In China, for example, the exporter of record must be a Chinese registered entity. The ICC has flagged this since Incoterms 2010 and recommends FCA (Free Carrier) for any cross border scenario, because FCA keeps export clearance with the seller.
Under EXW the seller's obligation ends at their premises and the buyer handles loading, inland transport to the port, and export clearance. Under FOB the seller's obligation ends on board the vessel at the named port of shipment, so the seller handles loading at the factory, inland transport to the port, export clearance, and terminal handling. Both leave main carriage and insurance to the buyer. Use EXW when the buyer has strong origin capability; use FOB when the buyer wants the seller to handle the origin leg. See our FOB in shipping guide for the FOB rule in full.
Use FOB when the shipment is by sea and the seller has export capability in their country; the seller handles the origin leg and the buyer picks up the ocean freight. Use EXW only when the buyer has a forwarding footprint in the seller's country and can file export clearance directly, or when the transaction is domestic and no export is required. For cross border ocean freight where the buyer is a US or European importer buying from Asia, FOB (or FCA for containerized cargo) is almost always the better default than EXW.
EXW and FCA are similar in that both leave the buyer to arrange main carriage. The critical difference is export clearance. Under EXW the buyer files export clearance in the seller's country (often impossible for a foreign buyer). Under FCA the seller files export clearance and delivers to the carrier nominated by the buyer, either at the seller's premises (in which case the seller loads onto the buyer's collecting vehicle) or at a named terminal. The ICC has recommended FCA over EXW for cross border trade since Incoterms 2010. See our FCA Incoterms guide for the FCA buyer and seller obligations.
Yes, EXW is one of the 11 current rules under Incoterms 2020, which took effect on 1 January 2020 and remains in force through 2029. Incoterms 2030 is the next revision, currently in the ICC review process; industry commentary suggests EXW may be restructured or removed in 2030 because of the cross border export clearance issue, but no draft wording has been published as of September 2026. There is no such version as "Incoterms 2026", and any contract or advisor quoting one should be corrected. For the current Incoterms family in full, see our complete Incoterms guide.
Yes for both, but with caveats. EXW applies to any mode, so it covers air, road, rail, sea, and multimodal. In practice, for containerized ocean cargo loaded at the seller's factory, the ICC has recommended FCA over EXW since Incoterms 2010 for the same reason it recommends FCA over FOB: FCA keeps export clearance with the seller and transfers risk cleanly at the container yard. For air freight, EXW works but adds an extra hop (buyer's ground trucking from seller's premises to the airport) that many buyers underestimate on the quote.
EXW (Ex Works) is the Incoterm that puts the whole international shipping burden on the buyer. The Ex Works price is the goods price only; the true landed cost typically runs 60 to 80 percent higher on a cross border move from Asia to the US. Risk transfers the moment the goods are made available at the seller's premises, not at collection, which is the single biggest first time importer trap. Export clearance sits with the buyer, which is legally impossible in most jurisdictions without a local exporter of record. For cross border trade the ICC recommends FCA (Free Carrier) instead of EXW; use EXW only when the buyer has a strong origin footprint or when the transaction is domestic.
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