Everything To Know About Exworks Incoterms (2025 Guide)

In international trade, Exworks is one of the most important terms you’ll come across when negotiating contracts and shipping goods. It clearly defines who is responsible for what in the delivery process, from the seller’s door to the buyer’s hands.

Whether you are an importer in Nigeria, an exporter in China, or a freight forwarder helping businesses move goods worldwide, understanding Exworks is crucial to avoid costly mistakes.

It says nothing about custom brokerage, insurance or any other costs or services associated with transporting a shipment.

What is Exworks?

Exworks (EXW) is one of the 11 rules under the Incoterms® 2020 published by the International Chamber of Commerce (ICC).

Under Exworks:

• The seller makes the goods available at their premises (factory, warehouse, etc.)
• The buyer is responsible for all transportation, export clearance, insurance, and costs from that point forward

In short, the seller’s job ends once the goods are ready for pickup.

How Exworks Works in International Trade

Here’s a step-by-step breakdown of how Exworks works in a typical transaction:

1. Seller Prepares the Goods
   Goods are packaged and ready for pickup at the agreed location.
2. Buyer Arranges Collection
   The buyer (or their freight forwarder) collects the goods from the seller’s premises.
3. Export Customs Clearance
   Under Exworks, the buyer is responsible for arranging and paying for customs clearance in the seller’s country unless otherwise agreed upon.
4. Transportation to Destination
   Buyer organises freight — whether by air freight, sea freight, or land transport.
5. Import Clearance & Final Delivery
   Buyer handles import duties, taxes, and final delivery to the destination.

Advantages of Exworks

For the seller:

• Minimal responsibility and lower costs
• No need to arrange international shipping or insurance

For the buyer:

• Full control over the logistics process
• Ability to choose cost-effective freight options

Disadvantages of Exworks

For the seller:

• Less appeal to buyers who prefer sellers to handle logistics

For the buyer:

• Higher responsibility for transportation and risk
• Need to manage export clearance in a foreign country

Exworks vs FOB

Many traders confuse Exworks with FOB (Free on Board), but they differ.

With FOB, the seller is responsible until the goods are loaded onto the vessel.
With Exworks, the seller’s responsibility ends before loading, as soon as the goods are ready for pickup.

Read Also: 20 Exportable Products From Nigeria

When to Use Exworks

You have an experienced logistics partner that knows the market, language and customs of the buyer’s country.
You want to cut out moving costs at home.
You want to avoid import duties, VAT and other taxes.
Your goods are small enough that they can be shipped by air freight (which is usually more expensive than sea freight).

Exworks works best when:

• Buyers have strong logistics networks
• Buyers want to control shipping routes and carriers
• The transaction is between trusted trade partners

Generally speaking, Ex-works should only be used if you have a reliable logistics partner who can manage the shipping side of things for you. It’s less ideal for inexperienced buyers unfamiliar with customs clearance or international shipping.

Final Thoughts for 2025

Exworks remains one of the most cost-effective Incoterms for sellers, but buyers should only agree to it if they fully understand their shipping obligations. Always specify:

• The exact pickup point
• Who handles export clearance
• Insurance arrangements

If you’re unsure whether Exworks is right for your shipment, consult an experienced freight forwarder.

Need Help with Exworks Shipments?

At Bowagate Global Ltd, we assist clients in:

• Understanding and applying the right Incoterms®
• Arranging freight under Exworks, FOB, CIF, and other terms
• Handling customs clearance and delivery worldwide

📞 +2348186078330
📧 [email protected]

Let’s help you move goods smoothly, legally, and cost-effectively under the right terms.