Potential pitfall for exporters using Ex Works
February 25, 2011 at 12:49 PM
By Jim Trubits
Many exporters like to sell under the Ex Works (EXW) rule of Incoterms (International Commercial terms, which are internationally recognized standards for international and domestic contracts for the sale of goods.). EXW seems to require the least obligation or responsibility for the seller.
Under EXW, a sellerhas the goods ready for collection at its place of business (manufacturing plant or warehouse) on the date upon which the parties have agreed. The buyer then pays all transportation costs and assumes the risks for bringing the goods to their final destination.
Taken at face value, Ex Works may appear to be the best, no-hassle choice for exporters that don't want the added burden of arranging transportation and ensuring export compliance. However, appearances can be deceiving. Exporters should use caution when selling under Ex Works, due to these potential pitfalls.
Jim Trubits is a senior advisor at Mohawk Global Trade Advisors. He has more than 30 years of experience in compliance consulting and supply chain management. Contact Trubits at email@example.com