Ex Works
What Does Ex Works Mean?
Ex works is a trade term indicating that the seller prepares the goods for shipment at their property—such as a warehouse, store, or factory—for the buyer to collect and transport elsewhere.
Under an ex works arrangement, all transportation and shipping expenses, as well as the associated risks, are the buyer’s responsibility, not the seller’s.
Insuranceopedia Explains Ex Works
Ex works is one of the Incoterms’ contractual terms used in international trade.
To illustrate how ex works works, suppose X, Inc. of Hong Kong orders spare parts from Y, Inc. of Japan. Y, Inc. prepares and stores the spare parts until they are ready for shipment. Once completed, X, Inc. is responsible for paying for the necessary documents, loading and unloading on land, shipping from Japan to Hong Kong, and possibly even cargo insurance.
In this arrangement, aside from the cost of manufacturing the goods, the buyer assumes responsibility for all other expenses. This can often be more cost-effective than having the seller bear the shipping costs.
