Simple Analysis Of The Difference Between EXW And FOB

2022-01-17

Hello everyone, this is Alice from Suzhou Pharma Machinery Co., Ltd. I am in charge of international shipping in our company. Today I will share with you what is the difference between EXW and FOB.

EXW trade terms: For customers, EXW trade terms are equivalent to taking all risks after the goods leave the factory. When communicating with the freight forwarder, be sure to tell the agent to purchase insurance for the goods and sign a transportation agreement to clarify responsibilities and ensure the safety of the goods.

When communicating with the manufacturer, in addition to confirming the condition of the goods, it is also necessary to confirm the packaging before shipping. For example, our clean room products must have corner protectors, foam cotton, etc. to protect the products.

FOB trade terms: For customers, FOB trade terms are almost the same as EXW trade terms, but for manufacturers to trade at FOB prices, the buyer needs to contact the freight forwarder and the manufacturer to connect the goods, and the manufacturer should Ship the goods to the designated warehouse or contact the agent designated by the customer to arrange for the container to be loaded at the factory within the specified time limit and the port of shipment specified in the contract, and notify the buyer in time. Risk passes from the seller to the buyer when the goods are loaded onto the named vessel at the port of shipment.

EXW is at the seller's location in the country of export, risk passes to the buyer, export duties are borne by the buyer, and any shipping method applies. FOB is delivered on board, and the place of delivery is the ship at the port of shipment in the exporting country. After crossing the ship's rail, the risk is transferred, the export tax is borne by the seller, and the applicable mode of transportation is water transportation.