Compare EXW and FOB under Delivery terms 2020,ICC
Here we can explain about FOB and EXW. As you are aware, FOB means Free On Board and EXW means Ex Works. What is the main difference between FOB and EXW under Inco Terms 2020 delivery rules according to ICC?
Under FOB the transfer of risks and costs from Seller to Buyer happens when goods gone onboard the vessel nominated by buyer. But under EXW terms, the seller transfers risks and costs when goods are placed at his premises or named place before pre carriage for the disposal of buyer for movement of goods.
EXW is used for all modes of transport (movement of goods by Air Sea and land ) whereas FOB is used for movement of goods by Sea and Inland waterways only.
Under EXW, the seller transfers his risks and costs when placing goods at his factory, premises or named place mutually agreed with buyer before pre carriage to final destination. However under FOB, the seller transfers his risks and costs of movement of goods to buyer at the time of goods gone onboard the vessel.
Loading of goods at named place under EXW is done by Buyer where in FOB terms, loading of goods at seller’s place is under the risks and costs of Seller.
Under EXW, the buyer undertake export customs clearance wherein the same is the responsibility of Seller under FOB terms.
EXW is ideally used by the buyer when he is acquainted with local transportation for pre carriage, export customs clearance process at seller’s country, main carriage, on carriage and import customs clearance experience and knowledge where in the Seller does not want to take risks and costs.
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EXW - Ex Works (named place)
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FOB – Free On Board (named Places)
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Costs
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Risks
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Costs
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Risks
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Warehouse services
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Seller
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Seller
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Warehouse services
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Seller
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Seller
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Marking and labeling
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Seller
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Seller
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Marking and labeling
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Seller
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Seller
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Packing of Goods
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Seller
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Seller
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Packing of Goods
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Seller
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Seller
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Loading at Seller’s premises
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Buyer
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Buyer
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Loading at Seller’s premises
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Seller
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Seller
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Transportation from Seller’s
premises to Load port
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Buyer
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Buyer
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Transportation from Seller’s
premises to Load port
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Seller
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Seller
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Unloading at Loading Port
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Buyer
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Buyer
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Unloading at Loading Port
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Seller
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Seller
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Loading to Vessel/Aircraft
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Buyer
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Buyer
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Loading to Vessel/Aircraft
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Seller
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Seller
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Export documentation
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Buyer
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Buyer
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Export documentation
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Seller
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Seller
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Export Customs Clearance
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Buyer
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Buyer
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Export Customs Clearance
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Seller
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Seller
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Export Taxes and duties (if any)
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Buyer
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Buyer
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Export Taxes and duties (if any)
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Seller
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Seller
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Handling at Load Port
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Buyer
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Buyer
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Handling at Load Port
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Seller
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Seller
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Main Carriage
(Ocean Freight/Airfreight)
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Buyer
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Buyer
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Main Carriage
(Ocean Freight/Airfreight)
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Buyer
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Buyer
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Import Customs Clearance
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Buyer
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Buyer
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Import Customs Clearance
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Buyer
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Buyer
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Import Documentation
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Buyer
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Buyer
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Import Documentation
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Buyer
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Buyer
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Import Taxes and Duties (if any)
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Buyer
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Buyer
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Import Taxes and Duties (if any)
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Buyer
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Buyer
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Transportation from destination port to named place
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Buyer
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Buyer
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Transportation from destination
port to named place
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Buyer
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Buyer
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Unloading at named place
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Buyer
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Buyer
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Unloading at named place
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Buyer
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Buyer
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A detailed explanation about EXW and FOB is written separately in this website, you may click below to read:
FOB Free On Board
EXW Ex Works
The above information clearly explains about EXW and FOB. You may share your thoughts on difference between EXW and FOB under Inco terms 2020.
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