EXW vs FOB
Under EXW (Ex Works) the buyer collects from the seller's premises and handles everything from there, including export clearance. Under FOB (Free On Board) the seller clears export and pays to deliver the goods on board the ship at the named port, where risk passes. FOB prices are higher than EXW by the origin trucking, export clearance and terminal charges.
Side by side
| Job | EXW | FOB |
|---|---|---|
| Export clearance | Buyer | Seller |
| Loading at origin | Buyer | Seller |
| Main carriage | Buyer | Buyer |
| Insurance | No obligation | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance and duties | Buyer | Buyer |
| Cost | In an EXW price | In a FOB price |
|---|---|---|
| Goods and packing | Yes | Yes |
| Loading at the seller's site | No | Yes |
| Trucking to the port | No | Yes |
| Export clearance | No | Yes |
| Origin terminal handling | No | Yes (usually) |
| Ocean freight | No | No |
The trouble with EXW
EXW puts export clearance on the buyer, but customs in many countries only accept an export declaration from a local entity. In practice the seller's agent often files it anyway, which leaves unclear responsibility and no export evidence for the seller's VAT. If the seller will load the truck and clear export, say so with FCA instead.
When FOB fits, and when it does not
FOB was written for goods loaded over the ship's rail. Container cargo is handed to the terminal days before loading, so the seller carries risk for goods it no longer controls. The ICC recommends FCA for containers. Many Asian suppliers still quote FOB for containers out of habit; it works if both sides agree who pays terminal charges.
Comparing quotes
To compare an EXW and a FOB quote, add the origin costs to the EXW price: trucking to port, export clearance and terminal charges. Then add freight, insurance and import costs to both for the landed cost.
See all 11 rulesThe responsibility matrix for every Incoterm.Sources
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Common questions
What is the difference between EXW and FOB?
Under EXW the buyer handles export clearance and transport from the seller's premises. Under FOB the seller clears export and delivers the goods on board the ship at the named port.
Is FOB more expensive than EXW?
The price is higher because it includes origin transport, export clearance and terminal charges; the total cost to the buyer is often lower because the seller arranges them locally.
Should I buy EXW or FOB from China?
FOB (or FCA for containers) is usually simpler: the supplier clears export, which a foreign buyer generally cannot do.
Who pays loading under EXW?
The buyer. The seller has no obligation to load, even though many do in practice; FCA at the seller's premises makes loading the seller's job.