What are Incoterms?
Before explaining each individual Incoterm, we first need to get to grips with what Incoterms actually are. Simply put, ‘Incoterms’ are International Commercial Terms, 11 rules for the purpose of making who is responsible for what during an international transaction crystal clear. Accepted globally and becoming a requirement in international trade, they take out the risk of a “lost in translation” misunderstanding and in 3 simple letters (bar the odd caveat) it pinpoints exactly where the burden of responsibility lies and transfers from buyer to seller regarding the costs, jobs and risks involved. It leaves little to no room for confusion and every party involved knows exactly where they stand.
Today we look at EXW…
EXW – Ex Works
Ex Works puts the large majority of costs and any risks involved of transportation of goods within the shipping process upon the buyer. The only onus to fall upon the seller is to provide access to the purchased goods, it’s then up to the buyer to arrange the loading of the goods and everything else from there on out.
Transfer of risk
This takes place at wherever the goods are being collected and loaded, be it a warehouse, office or any another agreed location.