EXW China: How It Works, Pros/Cons & Freight Forwarder Roles

Case Detail

EXW (Ex Works) is an international trade term where the seller makes goods available at their Chinese premises, and the buyer bears all costs (transportation, customs clearance) and risks from pickup to final destination.

How EXW China Works

Buyer and seller agree on sale details (price, quantity, delivery terms).
Seller prepares goods at their factory/warehouse and notifies the buyer.
Buyer arranges a freight forwarder to collect goods.
Buyer covers all transportation/customs costs and assumes full risk once goods leave the seller’s premises.

Pros & Cons of EXW China Shipping

Pros:

Cost-effective (lower seller costs may reduce purchase price for buyers).
Buyer controls shipping (chooses forwarder, method, and timing).
Flexible (buyers can select budget shipping options and negotiate rates).
Transparent (no hidden fees for transportation/customs).

Cons:

High buyer risk (liability for loss, damage, or theft during transit).
Heavy buyer responsibility (complex, time-consuming logistics/customs tasks).
Potential communication barriers (language/cultural differences with sellers).

Role of China Freight Forwarders in EXW

Freight forwarders act as key intermediaries for buyers:

Coordinate transportation (air/sea/land) from seller’s premises to destination.
Handle documentation (bills of lading, invoices) and ensure customs compliance.
Manage customs clearance and final delivery to the buyer’s location.

EXW China offers cost and control benefits but requires buyers to manage significant logistics risks. Partnering with a reliable freight forwarder can streamline the process and mitigate errors.