EXW China

EXW Shipping Terms from China

A Detailed Guide

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EXW (Ex Works) is a commonly used Incoterm in international shipping, where the seller’s responsibility ends once the goods are made available at a specified location, often the seller's premises or a warehouse. Under EXW terms, the buyer assumes all responsibility for the costs, risks, and logistics from the point the goods are made available for pickup. This term offers significant control to the buyer but also involves greater responsibility.

1. Key Aspects of EXW Shipping

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EXW (Ex Works) is one of the most buyer-focused Incoterms, where the seller's obligation is minimal, and the buyer assumes nearly all responsibility for the logistics and costs from the seller's premises.

Seller’s Responsibilities:

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Provide Goods: The seller must provide the goods in conformity with the sales contract.
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Export Documentation: The seller is responsible for providing any necessary licenses or documentation for export, although the buyer may request this at their own cost.
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Make Goods Available: The seller’s responsibility ends when the goods are made available at the agreed-upon location (e.g., a warehouse, factory, or another designated point).
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Costs & Risks: The seller bears all costs and risks up until the goods are made available for pickup.

Buyer’s Responsibilities:

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Pay for Goods: The buyer must pay for the goods as per the EXW price agreed in the contract.
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Handle Customs Clearance: The buyer is responsible for all aspects of customs clearance, both in China (export) and at the destination country (import).
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Transportation Costs: The buyer bears all costs related to the transportation of the goods, including freight, taxes, duties, and any other charges related to importation.
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Coordination: The buyer must coordinate with the seller to arrange the necessary export/import documentation.

2. Pros and Cons of EXW Shipping from China

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EXW Shipping offers a unique set of advantages and challenges. Understanding these pros and cons is essential for buyers to determine if this Incoterm aligns with their logistics capabilities and budget.

Pros of EXW Shipping:

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Full Control: The buyer has complete control over the shipping process, allowing them to choose the freight forwarder, negotiate rates, and determine the mode of transport.
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Transparency: EXW provides clear visibility into the costs, avoiding any inflated shipping rates charged by the seller.
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Versatility: EXW is applicable for any transportation mode—sea, air, rail, or road—giving the buyer flexibility in how they ship the goods.

Cons of EXW Shipping:

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Complex Customs Clearance: The buyer is responsible for navigating the complexities of customs clearance, which can be challenging, especially when importing to a new country.
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Additional Costs: The buyer must cover all expenses related to taxes, duties, inspections, and possibly unforeseen charges during transit.
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High Risk: The buyer assumes the risk for any loss or damage to goods once they are made available for pickup. If goods are mishandled, the buyer bears the loss.

3. Steps for EXW Shipping from China

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The process of shipping under EXW terms follows a specific sequence of steps to ensure a successful delivery:

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Seller Avails Goods at the Named Location: The seller makes the goods available for pickup at the agreed location, typically a warehouse or factory.
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Pick-Up and Transport to Loading Port: The buyer arranges for the pickup and transport of the goods to the nearest port or shipping terminal.
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Loading Goods into Transport Containers: The buyer is responsible for arranging the loading of goods into containers, whether FCL (Full Container Load) or LCL (Less-than-Container Load).
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Customs Clearance in China: The buyer must handle customs clearance in China before the goods are allowed to leave the country.
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Goods in Transit: After clearance, the goods are shipped to the destination country via the chosen method of transport (sea, air, rail, or road).
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Customs Clearance at Destination: The buyer clears the goods through customs at the destination port, ensuring all import documentation is correct.
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Transport to Final Destination: After customs clearance, the buyer arranges for the goods to be delivered to the final destination, such as their warehouse or store.

4. Costs of EXW Shipping

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Several cost components are involved in EXW shipping, which the buyer must account for:

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Handling Costs in China: Includes fees for loading, transporting the goods to the port, and possible inspection costs or supervision.
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Export Documentation and Customs Clearance: The buyer is responsible for export documentation and clearance at the Chinese customs.
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Freight: The buyer must cover the cost of transporting the goods from China to the destination port, whether via sea, air, or land.
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Destination Customs Clearance: The buyer handles all customs procedures at the destination, including taxes, duties, and clearance fees.
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Destination Handling and Delivery: The final cost, which includes transporting goods from the destination port to the buyer’s location, as well as any handling or unloading charges.

5. Key EXW Paperwork

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Several essential documents are required under EXW shipping terms to ensure the smooth transit of goods:

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Commercial Invoice: A document that lists the item details, price, and contract terms.
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Export License: This may be required for the goods to be exported from China, especially for certain regulated products.
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Packing List: A detailed inventory of the goods being shipped, specifying the quantity and type of items.
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Bill of Lading or Air Waybill: A receipt for the goods and proof of shipment that must be retained for customs clearance and other formalities.

6. EXW Shipping vs. Other Incoterms

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EXW is one of several Incoterms that can be used for international shipping. Below is how it compares to other commonly used terms:

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FOB (Free on Board): In FOB, the seller’s responsibility ends once the goods are loaded onto the ship. The buyer is responsible for all costs and risks from that point onward. Unlike EXW, where the buyer handles everything from the start, FOB gives the seller a bit more responsibility up until the goods are on board.
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FCA (Free Carrier): The seller clears the goods for export and delivers them to a carrier or a named place. Unlike EXW, where the buyer handles the full logistics, FCA means the seller manages export clearance.
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CPT (Carriage Paid To): In CPT, the seller covers the transportation cost to a specified destination, but the buyer assumes the risk once the goods are handed to the carrier.
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CIP (Carriage and Insurance Paid To): Similar to CPT, but the seller also provides insurance for the goods in transit.
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DAT (Delivered at Terminal): The seller delivers the goods to a terminal at the destination port. The buyer assumes responsibility once the goods are made available at the terminal.
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DAP (Delivered at Place): The seller handles most logistics up to a specified destination but does not clear customs for import duties and taxes.
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DDP (Delivered Duty Paid): In DDP, the seller is responsible for all logistics, customs duties, taxes, and final delivery to the buyer’s location, offering a much more comprehensive solution than EXW.

7. Working with ShangHai Freight Forwarders

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Navigating the complexities of EXW shipping can be challenging. Working with a professional freight forwarder like ShangHai Freight Forwarders can make this process easier. ShangHai offers expert assistance with:

- Customs Clearance: Handling both export clearance in China and import procedures at your destination.
- Transport and Logistics: Helping with transport, container loading, and coordination with carriers.
- Documentation Assistance: Ensuring you have all necessary paperwork for smooth shipping.

Let ShangHai Freight Forwarding streamline your shipping experience. Request a quote today for seamless, reliable, and cost-effective shipping!