Ex Works

Updated: 29 February 2024

What Does Ex Works Mean?

Ex works is a trade term that means that the goods being shipped are prepared by the seller in the seller's property, such as a warehouse, store, or factory, for the buyer to then pick up and transport elsewhere.

An ex works shipment signifies that the expenses related to transportation and shipping are the responsibility of the buyer and not the seller.

Insuranceopedia Explains Ex Works

Ex works is one of the Incoterms contractual terms used in international trading.

To illustrate how ex works functions, suppose X, Inc. of Honk Kong orders spare parts from Y, Inc. of Japan. Y, Inc. then packages and stores the spare parts until they are reading for shipment. Once completed, X, Inc. pays for necessary documents, loading and unloading on land, shipping from Japan to Hong Kong, and possibly even cargo insurance.

In other words, aside from the cost of making the goods themselves, the buyer pays for everything. Doing so can be less costly than transferring the cost of shipping to the seller.

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