Incoterms
FOB vs EXW: Which Incoterm to Use
Compare EXW factory delivery with FOB port loading — export clearance, cost, and risk for importers.
EXW leaves export and loading to the buyer; FOB adds seller export clearance and loading on board at the port.
Key Differences at a Glance
EXW minimizes seller duty at the factory; FOB adds export formalities and port loading for sea shipment.
Seller vs Buyer Obligations
EXW: goods ready at premises. FOB: export cleared and loaded on vessel.
EXW: buyer handles export and all carriage. FOB: buyer from port of loading onward.
Risk Transfer and Cost Structure
EXW risk at factory gate; FOB risk when on board at port of shipment.
EXW unit price is lower but buyer pays more downstream charges.
Which Term to Choose
Overseas buyers without origin export capability should prefer FOB. Domestic pickup or strong local logistics favors EXW.
Examples
Example — EXW + hidden costs
EXW USD 10 + export/truck USD 2.5 vs FOB USD 12 all-in to port — compare totals.
Example — Switch to FOB
European buyer asks Chinese supplier to quote FOB instead of EXW for simpler clearance.
FAQ
- Is EXW cheaper than FOB?
- Headline yes — total cost may not be after buyer export and haulage.
- Can a foreign buyer export from China under EXW?
- Often difficult — FOB/FCA is typical for international buyers.
- Which term for first-time importers?
- FOB or CIF is usually simpler than EXW.
- Does FOB include trucking to port?
- Yes — seller pays inland to port and loading under FOB.
- Can we mix EXW price with FOB shipment?
- No — pick one Incoterm and align invoice and B/L.
Conclusion
Match the term to who can export at origin. Model both with EXW and FOB calculators.