Less risk for an Exporter, Which Inco terms is better?

Which Inco Term is safe for a Buyer?

When we www.exportimport.com team conduct training classes, a common question about delivery of terms is that; among all inco terms of delivery, which term is safer for Exporter?, Best suitable term for Importer etc.


The safe and best terms of delivery for an Exporter are EXW (Ex Works) (named place) under Incoterms 2020.  Under EXW terms, the seller places his goods at his premises or other named location contracted with his buyer.  

Why EXW is safest method of Inco Terms for a Seller?  Because, the costs and risks transfers from him to buyer immediately up on placing the goods for the disposal of buyer for pre carriage.  Out of all delivery terms, EXW carries minimum risks and costs.  The buyer arranges the manufactured goods duly packed and places at the named place.  

Once after placing packaged goods at named place contracted either at his premises, the responsibility of costs and risks passes to the Seller. All further costs and risks of pre carriage, export documentation, customs clearance, main carriage, destination port customs clearance and on carriage is undertaken by the Buyer (Importer). 

In short, under EXW, minimum risks and costs are undertaken by Seller (exporter), thereby the safest mode of delivery terms for an Exporter (seller) is EXW.   However, if an exporter can take high risks, he could make high profit, if he acquaints sound knowledge and experience in movement of goods both at his side and buyer’s country with government rules and regulations of both countries in customs handling and taxes.

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