What Is EXW? Ex Works Shipping Term

EXW (Ex Works) is an Incoterms 2020 trade term that places the minimum obligation on the seller. Under EXW, the seller makes the goods available at their premises (factory, warehouse, or mill). The buyer bears all costs and risks from that point forward—including loading, inland transport, export clearance, freight, insurance, import clearance, and delivery to the final destination.

EXW represents the “naked” price of the goods. Every logistics cost is the buyer’s responsibility.

EXW Cost and Risk Allocation

Responsibility	Seller	Buyer
Manufacturing and packaging	Yes	No
Loading onto buyer’s truck	No (buyer’s risk)	Yes
Export customs clearance	No	Yes
Inland transport to port	No	Yes
Origin port handling	No	Yes
Sea freight	No	Yes
Marine insurance	No	Yes
Destination port handling	No	Yes
Import customs clearance	No	Yes
Inland transport to site	No	Yes

EXW Pricing Example

A purchase of 300 tons of ASTM A106 Gr. B seamless pipes from a mill in Cangzhou, China:

Cost Element	Party	Amount (USD/ton)
Mill price (EXW Cangzhou)	Seller	1,750
Loading at mill	Buyer	10
Inland transport to Tianjin port	Buyer	45
Export customs clearance	Buyer	15
Port handling and loading	Buyer	30
Sea freight to Jubail	Buyer	110
Marine insurance	Buyer	12
Destination port handling	Buyer	40
Import customs clearance	Buyer	20
Inland transport to project site	Buyer	35
Total landed cost		2,067

The $317/ton gap between EXW and landed cost demonstrates why comparing EXW quotes against FOB or CIF quotes without normalization produces misleading results.

Practical Limitations of EXW

EXW has significant practical drawbacks for international piping material procurement:

Issue	Problem	Alternative
Export clearance	Buyer must clear exports in the seller’s country. Foreign buyers often cannot act as exporter of record	Use FCA instead—seller handles export clearance
Loading risk	Buyer bears risk during loading at seller’s premises, but has no control over the loading operation	FCA shifts loading responsibility to seller
No transport document	Seller has no obligation to provide a bill of lading or transport document	Under FOB/CIF, seller must provide B/L
Tax complications	In some countries, EXW includes domestic VAT that the foreign buyer cannot recover	FCA or FOB pricing may exclude VAT for export goods

Common Mistake

Using EXW for international shipments when the buyer has no logistics presence in the seller’s country. The buyer is responsible for loading, export customs, and inland transport in a foreign jurisdiction. Most international buyers lack the local permits, trucking contracts, and customs brokerage to execute this. FCA (Free Carrier) is almost always a better choice—it keeps the same cost transparency as EXW but shifts export clearance and loading to the seller, who can handle these activities in their own country.

EXW vs FCA vs FOB

Aspect	EXW	FCA	FOB
Seller’s delivery point	Seller’s premises	Named place (carrier)	On board vessel
Loading	Buyer	Seller	Seller
Export clearance	Buyer	Seller	Seller
Inland transport	Buyer	Depends on named place	Seller (to port)
Transport mode	Any	Any	Sea only
Risk transfer	At seller’s door	At carrier	On board vessel

When EXW Makes Sense

EXW is appropriate in limited scenarios:

Scenario	Why EXW Works
Domestic purchases	Buyer and seller in same country; no export/import clearance needed
Buyer has own trucks at mill	Buyer picks up goods directly from factory
Price benchmarking	EXW reveals the true manufacturing cost without logistics markup
Back-to-back trading	Trader needs the base price to add own margins and logistics

For international EPC piping procurement, FOB and CIF remain the dominant terms. For the complete Incoterms 2020 definitions and shipping documents required under each term, see the detailed guides.

Read the full guide to pipe classes and specifications