Lesson 1 / 11 · any mode of transport
EXW Ex Works
The seller simply has the goods ready at its own premises (or another named place). The buyer does — and pays for — everything else, starting with loading, and carries the risk from the moment the goods are made available.
Reviewed by: pending — expert review by TermVisa's editor (retired VP, international transport) in progress · Last updated
Scenario
Garden furniture collected at a factory in Vietnam for a Dutch importer
EXW Binh Duong Incoterms® 2020
- Seller
- Furniture factory, Binh Duong (near Ho Chi Minh City), Vietnam
- Buyer
- Furniture importer, Rotterdam area, the Netherlands
- Transport
- Sea — 40-foot container, Cat Lai (Ho Chi Minh City) → Rotterdam
The seller, a furniture factory in Binh Duong, Vietnam, sells a 40-foot container of teak garden furniture to the buyer, a furniture importer near Rotterdam, the Netherlands, under EXW Binh Duong Incoterms® 2020 (the contract names the factory's loading bay). The buyer's forwarder sends an empty container on a truck, has it loaded, handles the export formalities in Vietnam, ships it from Cat Lai (Ho Chi Minh City) to Rotterdam and clears it on arrival. The seller's only job is to have the furniture packed and ready on the agreed date.
Illustrative scenario: companies are generic, and real contracts, carriers and countries add their own conditions.
The journey, stage by stage
Top bar: who pays for each stage. Bottom bar: who bears the risk of loss or damage. The red line marks where risk passes.
- Seller
- Buyer
- Depends on contract / carrier or port practice
- Point where risk passes
⚠ Risk passes as soon as the furniture is placed at the buyer's disposal at the factory — before anyone loads it.
- Loading at the seller's premises — Buyer: Loading is on the buyer's side — agree in writing if the seller's staff help
- Export clearance — Buyer: Buyer's agent handles export formalities; it needs the seller's data
- Pre-carriage to the departure terminal — Buyer: Truck to Cat Lai terminal
- Departure terminal handling and loading — Buyer: Terminal handling at Cat Lai
- Main carriage — Buyer: Ocean freight Cat Lai → Rotterdam
- Arrival terminal: unloading and handling — Buyer: Arrival charges at Rotterdam
- Import clearance, duties and taxes — Buyer: EU duty (if any) and import VAT
- On-carriage to the named place — Buyer: Truck to the buyer's warehouse
Who does what in this scenario
| Party | What they arrange / do | Who pays (them / what they pay) | Risk they carry | Key documents |
|---|---|---|---|---|
| Seller / exporter | Packs the furniture, tells the buyer when it is ready and supplies, on request, the information the buyer needs for export and import. | Production and packing only. | Only until the goods are made available at its premises. | Commercial invoice, packing list, notice of readiness. Ask for proof of export afterwards: it may matter for the seller's own tax position. |
| Buyer / importer | Sends the truck and container, loads, has the export handled through an agent in Vietnam, books the ocean freight and clears the goods into the EU. | Everything from the factory door: loading, trucking, export formalities, terminals, freight, insurance, duty, import VAT, delivery. | From the moment the goods are available at the factory, even before loading. | Export declaration (through its agent), bill of lading, import declaration, proof of collection for the seller. |
| Origin freight forwarder | The buyer's forwarder in Vietnam organises the container, loading supervision, the export filing through a local broker and the booking. | Buyer. | Its own errors, under its trading conditions. | Cargo receipt, house bill of lading. |
| Destination freight forwarder | Partner in Rotterdam: arrival, customs coordination, delivery. | Buyer. | Its own handling. | Arrival notice, delivery order. |
| Road carrier (trucking company) | Brings the container to the factory and back to the terminal. Under EXW, loading and securing is the buyer's job unless agreed otherwise. | Buyer, through its forwarder. | Liable for transit damage within legal and contractual limits. | Road consignment note. |
| Ocean carrier (shipping line) | Carries the container Cat Lai → Rotterdam. | Buyer. | Liable within convention and bill-of-lading limits. | Bill of lading or sea waybill. |
| Cargo insurer | No insurance obligation. The buyer should insure from the factory door. The seller should check whether goods already sold but awaiting collection are still covered on its premises. | Each party for its own cover. | Per policy terms. | Buyer's cargo policy or certificate. |
| Customs broker (export) | Files the export declaration in Vietnam for the buyer. Most countries require one; value thresholds, exceptions and export-control checks vary — ask the broker. Under EXW the buyer's agent files, but national rules — not the trade term — decide who may be named as exporter; in some countries it must be a local party, which pulls the seller back in. | Buyer. | Answers to its client for filing errors; the exporter stays responsible to customs. | Export declaration and release (proof of export). |
| Customs broker (import) | Classifies the goods, files the import declaration in the Netherlands for the buyer as importer, pays duties and import taxes on its account and obtains release. | Buyer. | The buyer remains responsible to customs as importer; the broker answers to it for its own errors. | Import declaration, duty and tax receipts, release. |
| Banks (letters of credit) | A poor fit for documentary credits: the seller never receives a carrier's transport document. If a credit is used, it usually calls for a forwarder's receipt — agree this upfront. | As negotiated. | Documentary risk for the seller. | Documentary credit, forwarder's cargo receipt. |
| Terminals and ports | The seller's own loading bay is the hand-over point. Cat Lai and Rotterdam terminals bill the buyer's side. | Buyer. | Their own handling. | Gate-in and terminal receipts. |
✗ Common mistakes
- Using EXW for an export when the buyer cannot easily handle export formalities in the seller's country. FCA is usually the better fit.
- Loading the buyer's truck as a courtesy without agreeing who bears the risk during loading.
- Seller ending up with no proof that the goods were exported — a problem for its tax position at home.
- Buyer forgetting that goods waiting at the seller's premises are already at its risk.
- Agreeing a documentary credit that asks for a bill of lading the seller can never obtain.
? What to ask before you sign
- Your customs broker (Buyer) Can my agent legally file the export in the seller's country, and under whose name?
- Your freight forwarder (Both) Who loads and secures the cargo at the factory, and who is liable if it is damaged while loading?
- Your cargo insurer (Seller) Are goods already sold, but awaiting pick-up on our premises, still covered?
- Your cargo insurer (Buyer) Does my cover start at the seller's door, before loading?
- Your freight forwarder (Seller) Will you send us proof of export after departure?
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