EXW vs FOB (Incoterms 2020)
Under EXW the seller only makes the goods available at its premises; the buyer loads them, clears them for export and arranges all transport. Under FOB the seller clears the goods for export, brings them to the port and loads them on board the ship the buyer has booked, and the risk passes once they are on board. FOB is for sea and inland waterway transport only.
Side by side
| EXW · Ex Works | FOB · Free On Board | |
|---|---|---|
| Transport Different | Any mode | Sea and inland waterway |
| Delivery and risk pass to the buyer Different | At the seller's premises, goods made available, not loaded | On board the ship at the port of shipment |
| Main freight paid by | Buyer | Buyer |
| Insurance | Not required | Not required |
| Export clearance Different | Buyer | Seller |
| Import clearance and duties | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Where risk and costs pass from the seller to the buyer
SellerBuyer
Origin → Main carriage → Destination. Simplified diagram: the exact point is the named place written after the rule. The costs line shows who pays the main carriage and, under DDP, the import duties and taxes.
Seller's obligations compared (A1–A10)
| EXW | FOB | |
|---|---|---|
| A1/B1 General obligations | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. |
| A2/B2 Delivery and taking delivery | Place the goods at the buyer's disposal at the agreed point, if any, at the named place, not loaded on any collecting vehicle, on the agreed date or within the agreed period. | Deliver by placing the goods on board the ship nominated by the buyer, at the loading point indicated by the buyer at the named port of shipment, or procure goods so delivered; if no point is given, the seller may choose one. |
| A3/B3 Transfer of risks | Bears all risk of loss or damage until the goods are made available. | Bears all risk until the goods are on board the ship. |
| A4/B4 Carriage | No obligation to arrange transport. At the buyer's request, risk and cost, give any information the buyer needs to arrange it, including security requirements. | No obligation to contract carriage; if agreed, the seller contracts it on usual terms at the buyer's risk and cost. Meets transport-related security requirements up to delivery. |
| A6/B6 Delivery or transport document | No obligation to the buyer. | Provide, at its cost, the usual proof that the goods are on board, and help the buyer obtain a transport document. |
| A7/B7 Export and import clearance | No export clearance duty. Where applicable, help the buyer, at its request, risk and cost, with documents and information for export, transit and import clearance. | Carry out and pay for export clearance. Where applicable, help the buyer, at its request, risk and cost, with documents and information for transit and import clearance. |
| A9/B9 Allocation of costs | Pay all costs until the goods are made available, except those the buyer pays. | Pay all costs until the goods are on board, including loading, the proof of delivery and export clearance. |
| A10/B10 Notices | Give the buyer any notice it needs to take delivery. | Give the buyer sufficient notice that the goods have been delivered, or that the ship did not take them in time. |
When to use each rule
EXW
EXW suits domestic sales, or buyers who have their own freight forwarder and customs agent in the seller's country. For most international sales FCA is the safer choice, because the seller then clears export, which a foreign buyer often cannot do.
FOB
FOB is meant for sea and inland waterway transport where goods are loaded directly on board, such as bulk and break-bulk cargo. It is widely used for containers too, but the ICC recommends FCA for container shipments.
Compare other rules
A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.
Guides on this topic
Common questions
Who pays for loading under EXW?
The buyer. The seller is not obliged to load. If the seller's staff do load the truck, the risk of damage during loading stays with the buyer unless the contract says otherwise.
Does FOB include freight?
No. Under FOB the buyer books and pays the sea freight. The seller's price covers the goods delivered on board at the port of shipment.
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