In the coming weeks, we’ll break down the practical risks of different INCOTERMS. First up: EXW (Ex Works) – a seemingly simple term that often causes serious logistical and customs headaches, especially for importers. Here's how to avoid delays, unexpected costs, and costly misunderstandings.

What Is EXW and Why Can It Be So Risky?

EXW (Ex Works) means the seller makes the goods available at their premises, and from that point on, all transport, export clearance, and risks are the buyer’s responsibility.

That sounds straightforward – but in reality, it often leads to:

• ❌ The buyer not being able to complete export clearance in the seller’s country (e.g. India), because only a local entity or customs agent can do it.
• ❌ The buyer struggling to organize transport, especially when they’re unfamiliar with local freight forwarders, requirements or timelines.
• ❌ No control over how or when the goods are picked up – and yet all liability is on the buyer.

Real-World Example: Why EXW Can Backfire from India

An EU importer purchased goods under EXW terms from India. But the buyer couldn't legally handle export clearance, and the seller didn’t assist. The shipment sat at the warehouse for over a week.
Result: €4,000 in storage and demurrage fees, not to mention a frustrated end customer.

Bill of Lading (BL) Headaches with EXW

Here’s a pro tip for procurement teams:
If you’re not in control of the shipment, don’t forget the telex release.

Many sellers using EXW don’t coordinate with the freight forwarder. If the original BL isn’t released on time or goes missing, it delays everything. Without a telex release, the buyer may struggle to claim the goods at the destination port – despite having paid for transport.

What to Do Instead?

• ✅ Prefer FCA (Free Carrier) – the seller clears customs and hands over the goods to the buyer’s forwarder at an agreed location.
• ✅ If the seller refuses to quote FCA or assist with freight, ask your freight forwarder to step in. A good forwarder can handle local pickup, customs clearance and provide proper documentation – even in tricky export countries like India.
• ⚠️ Be selective: not all local agents have the same reliability or network.

Summary

EXW can work in controlled, intra-company scenarios or highly standardized supply chains. But if you’re sourcing from outside the EU – especially from complex markets like India or China – EXW often causes more harm than good.

Always ask yourself: who has the local know-how, legal standing, and logistics control to get the goods moving? If it’s not the buyer, EXW probably isn’t the right choice.

👉 Recommended Reading:

• INCOTERMS Pitfalls in 2025 – How to Choose the Right Clause in International Trade | SAS - Smart & Smooth

📬 Interested in more international trade tips and real-world case studies?
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