Distinguish between EXW and CIF under delivery rules

CIF Vs EXW, a comparison under Inco terms 2020

Difference between CIF and EXW under delivery rules 

How to differentiate CIF and EXW delivery rules according to Incoterms 2020 published by ICC?

Let us compare CIF and EXW

EXW is ideally used by seller who does not want to take the risks and costs involved under  all modes of carriages and export and import customs clearance where  the buyer undertakes the same by adding up such costs in turn more profit against the said risks.

EXW is use for movement of goods for all modes of transport;  Sea, Air or Land.   However, CIF is known as marine restricted modes of delivery and is used only for the movement of goods by Sea and Inland water transport.

Under CIF rules for delivery of goods, the seller is responsible to arrange insurance where under EXW terms, ICC is silent about insurance and neither the party is responsible as per Incoterms 2020, thereby either of the parties may arrange as per their mutual written understanding under their contract of carriage in sale agreement.

Costs and risk of delivery of goods transfers from seller to buyer when goods are placed at seller’s premises for the disposal of buyer for further movement of pre carriage.  But the cost of pre carriage, and transportation to loading port, cost of freight till the destination port name mentioned in buyer’s country is undertaken by seller under CIF terms.  However, the risk of seller transfers to buyer, when goods are gone board the vessel under CIF rules of delivery.

Under EXW, the buyer undertakes the responsibility for export customs clearance whereas under CIF terms, it is the responsibility of seller.

Delivery of goods does not take place under CIF terms where in delivery of goods takes place under EXW.

The term EXW and CIF are explained easily in this website separately and you may click below to read:

CIF  Cost Insurance and Freight

EXW   Ex Works

The above information makes you to understand the difference between EXW and CFR.  If you would like to add more information on the difference between EXW and CFR, share below your thoughts.

Click here to read other delivery rules under Inco terms  

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