EXW (Ex Works)
For EXW shipping, the buyer arranges the full shipment, from the supplier’s warehouse to the cargo’s ultimate destination.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The buyer is liable and responsible for almost every step. The seller is only responsible for the Bill of Lading or Air Waybill, and ensuring that the goods are available for pickup at the named place, usually their factory, at a time agreed with the forwarder.
FOB (free on board) – Recommended
In other words, the supplier is “free” of responsibility. ‘On board’ simply means that the goods are on the ship.
As such, FOB shipping means that the supplier retains ownership and responsibility for the goods until they are loaded ‘on board’ a shipping vessel. Once on the ship, all liability transfers to the buyer.
The further clarify, let’s track the FOB shipping process:
- You purchase goods from a supplier in China and agree to FOB shipping terms. The next three steps of the process are carried out at the supplier’s expense.
- Your goods are packaged and loaded onto a truck (or another form of transportation) at the supplier’s warehouse (or another facility).
- The truck brings the goods to the port.
- The goods are loaded on board the shipping vessel.
- Once aboard, the rest of the journey from China is now both your liability and your expense. Anything that happens from this point is on you.
The concept is illustrated below: