EXW, Advantages for Exporter
This post explains about the merits for exporters when contracting delivery terms on EXW basis.
The major 10 advantages for seller under EXW terms of delivery is explained below:
01.One of the main advantages under EXW for exporter is that, among all delivery rules, EXW (Ex Woks) is treated as riskless Inco terms from Seller point of view. In export import trade, the exporter is liable to bear minimum risks of placing goods at the named place at the disposal of the buyer for further movement to his final destination. This is an advantage for seller under EXW.
02. Another advantage for seller under EXW is that under Ex-works delivery terms of movement of goods, the volume of amount invested by Seller is least. So, an exporter in international trade can save working capital up to that level, as some times, the cost of pre carriage, main carriage, on carriage expenses, export clearance and import customs clearance costs would be more than 150% of the product cost when shipping from a remote location of exporter’s country to another remote location of importer. This is another advantage for exporter under EXW terms of delivery in international business.
03. Under EXW, the seller does not want to bother about government rules for movement of goods in his country, as buyer takes care of the same. This is another advantage of exporter under EXW.
04. Since the importer takes care of export customs clearance process, export documentation and export taxes if any, the exporter is free from such liabilities, if the carriage contract is on EXW basis. This is an advantage for exporter under EXW.
05. Another benefit for seller under EXW is that, since the importer is responsible for import documentation and customs clearance, the exporter is free from such liabilities at destination country.
06. Once transferring risks when placing goods at exporter’s named place, the safety of goods is taken care by importer under EXW, thereby the seller is free from any loss or damage of goods shipped. This is another advantage for exporter under EXW delivery rules.
07. The loading and unloading risk of damages and loss of goods during any point of movement of goods also is under the responsibility of buyer under EXW terms, thereby seller is free from such risks and costs. So the exporter is benefited under EXW terms under such responsibilities.
08.The seller does not want to monitor the cost of movement of goods at each point of movement of goods, as the total cost is covered by buyer. This also is another advantage for exporter under EXW delivery rules.
09. Another benefit for export is that under EXW, the exporter does not want to bother to appoint a freight forwarder for movement of goods from his place to the buyer’s place.
10.Since complete control over movement of goods is taken care by importer, the exporter is free from maximum risks and costs involved under EXW. This is treated as total advantage for an exporter when contracting EXW as delivery term to move goods from seller’s place to buyer’s named destination.
We have discussed the above advantages for exporter when contracting delivery terms on Ex works basis (EXW).
You May add below your thoughts about the advantages of EXW for a buyer under Incoterms rules 2020 for movement of goods.