Ex Works Vs. Carriage Paid To

CPT Vs EXW, the differences under Inco terms 2020

Here, let us discuss about the difference between EXW and CPT under Inco terms 2020.

CPT and EXW delivery terms rules are used for any modes of transport – Air, Sea or Land.  However there are some difference between CPT and EXW.  Let us discuss the differences between both.

 The liability on costs involved for an exporter under EXW ends at exporter’s country, where as under CPT terms, the responsibility of cost transfers from exporter to importer at importer’s country. 

Under CPT terms, the seller delivers goods to the named place or the carrier nominated by the buyer at buyer’s country, whereas the seller’s responsibility on costs and risks under EXW ends when placing goods at his premises or named place.

The costs and risks involved for loading of goods at seller’s premises is with the Seller under CPT terms, where as it are at the buyer’s in case of EXW.

Under EXW terms, pre carriage is done by Buyer with his costs and risks, whereas under CPT terms, the seller is responsible for cost and risk involved under pre carriage. 

Under EXW, the buyer is responsible for main carriage where as the seller is responsible for main carriage under CPT in Export Import Trade.

Export documentation and export customs clearance are undertaken by the importer under EXW terms, but export customs clearance and documentation is done by exporter under CPT terms.

In an export import trade, the exporter undertakes the cost of main carriage under CPT terms of delivery whereas the costs and risks of main carriage is the responsibility of importer under EXW.

Import documentation and customs clearance at importing country is undertaken by the buyer under EXW terms, but   the same responsibility is on the shoulder of exporter under CPT terms.

On carriage to named placed contracted is paid by the seller under CPT terms whereas the on carriage risks and costs is undertaken by importer under EXW delivery rules under Incoterms 2020.

Under EXW the delivery to named place takes place at buyer’s premises or specific location named.  However, under CPT terms the delivery takes place at the time of goods gone on board the vessel or aircraft (main carriage) however the costs shared up to the named location at importers country.   Means, under CPT terms, the risks transfers from buyer to seller at the time of goods gone onboard the vessel or aircraft but cost shared up to the named place reached. 

If  the seller is not familiar with the local transportation and risk involved in pre carriage, main carriage and on carriage of  movement of goods with export customs clearance process  and does  want to take minimum risks and costs involved in movement of goods, he opts EXW terms.  However, under CPT terms, the seller is aware of the costs and risk involved in pre carriage, the costs involved under main carriage and the expenses involved at on carriage at destination country.

Under EXW, the seller is liable for cost and risk to place the goods at his premises or named location before pre carriage.  However, under CPT terms the seller undertakes the cost of pre carriage, export customs clearance and the cost of transportation from destination port at buyer’s country to the named place contracted in carriage agreement under their sale contract.  However, the risk of movement of goods transfers from seller to buyer immediately upon the goods gone on board the first main carrier.

Under EXW, the destination named place in seller’s country and under CPT terms, the destination named place is at Seller’s country.

A detailed posts about CPT and EXW are available in this website and you may  click below to read  the same for better understanding on difference between EXW and CPT.

CPT  Carriage Paid To

EXW   Ex Works

Hope the above information satisfies you to know the difference between EXW and CPT under Inco Terms 2020.  If you would like to share more information about the difference between CPT and EXW, share below your thoughts.

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