EXW vs FOB

You don’t know what is the Difference Between EXW incoterm vs FOB incoterm?

Are you importing products in bulk from China?

If you want to ship products overseas and you’re not sure which country to focus on, it’s important to understand the different shipping abbreviations.

In this blog post, we’ll take a look at the differences between these two shipping abbreviations so that you’ll be able to make an informed decision as to which one is best for your company.

Table of Content

Chapter 1: Overview About the FOB Shipping Incoterm?

Chapter 2: Overview About the EXW Shipping Incoterm

Chapter 3: Advantages and Disadvantages of FOB vs. EXW

Chapter 4: EXW VS FOB Which is better?

Chapter 5: FAQS About the difference between FOB VS EXW

Chapter 1: Overview About the FOB Shipping Incoterm?

1. What is FOB incoterm?

What is FOB incoterm

FOB stands for “Free on Board.” This means that the seller pays all transportation and insurance costs after the goods have been loaded on the transporting vehicle at the seller’s plant or warehouse.

FOB pricing can be advantageous to customers because they do not have to pay these costs upfront and instead pay them when they receive their product.

2. What does FOB stand for?

FOB stands for Free On Board. This is the most common type of shipping term because it is easier for an overseas seller to ship their goods to a port in the destination country, and then have the buyer take responsibility for getting them off the boat.

3. How does FOB compare to other shipping methods?

A FOB term means that the seller is responsible for the transportation of the goods from their factory to a loading port.

The buyer will be in charge of transporting the goods from the port to their desired location.

This process can add extra cost for buyers and sellers – they may need to add on an import or export fee, when working with a smaller load, or when needing to make sure that all regulations are met when shipping abroad.

 How does FOB compare to a CIF term?. A CIF term means that the seller is responsible for the transportation of the goods.

Chapter 2: Overview About the EXW Shipping Incoterm

Overview About the EXW Shipping Incoterm

The acronym EXW stands for Ex Works, which is often used in international trade to describe a type of pricing.

The seller has the responsibility of delivering the goods to the buyer’s desired location. The FOB acronym stands for Free on Board, which means that when goods are taken onto a ship or aircraft, the seller has fulfilled its obligation to deliver them.

1. EXW Incoterm

EXW is also known as “free on board.” This means that the seller will load the goods onto the ship and clear them through customs before they arrive at their destination.

You’ll have to pay duties and taxes when you receive it, but this is significantly cheaper than FOB.

2. Difference between EXW and FOB.

EXW is the price of goods at the point of manufacture. FOB is the price of goods at the point of export.

Difference between EXW and CIF…EXW is the price of goods at the point of manufacture. CIF is the price of goods at the point of import.

Chapter 3: Advantages and Disadvantages of FOB vs. EXW

Advantages and Disadvantages of FOB vs. EXW

1. Advantages and Disadvantages of FOB

Time is money for most businesses. You will want to choose the shipping method that will keep your inventory levels low, avoid delays, and save you money.

FOB (Free on Board) means that goods are handed over to the carrier at your place of business. This will allow you purchase less insurance because the risk of loss or damage is transferred to the carrier upon delivery.

However, this method may not be preferred if you have long manufacturing lead times or don’t have much space at your location.

2. Advantages and Disadvantages of EXW

 The EXW (Ex Works) shipping method means that the manufacture takes responsibility for handed over goods at their premises which can be risky for companies with poor logistics.

 In order to simplify the ordering process and reduce costs, manufacturers will often source from other suppliers. This can be a major problem if you are not aware of this practice.

EXW, or Ex Works, is a term used in international trade to define the price and delivery terms for an agreement between a buyer and seller.

The seller will deliver the products at their own cost and risk. However, buyers can choose to agree to other transit and insurance arrangements.

The main advantages of EXW are that there is no risk or liability for either party. Both parties will be responsible for any export duties and taxes ( not including VAT).

The main disadvantage of EXW is that the seller will be responsible for any export duties and taxes (not including VAT).

This is sometimes problematic, especially if the buyer wants to ship the goods through a port that has high export duties. While almost all types of goods can be shipped.

Chapter 4: EXW VS FOB Which is better?

EXW VS FOB Which is better

When you are deciding on how to send your products around the world, it’s important to know what your options are.

There are two main types of shipping, FOB and EXW. Find out in this article what these terms mean and how they can affect the price of your shipment!

Ex Works does not include any additional charges or distribution fees. The seller is responsible for the logistics of getting the goods from the factory to the buyer, as well as preparing those goods for shipment to the buyer.

 The seller also is responsible for making sure that all products are in a condition that is safe and workable.

On the other hand, Free On Board includes a few extra duties and responsibilities. The buyer pays freight costs to have their products delivered from a port.

Afterward, they’re responsible for handling any import taxes and customs fees. In addition, they’ll need an export license if their goods need one depending on where it’s being shipped to.

Chapter 5: FAQS About the difference between FOB VS EXW

FAQS About the difference between FOB VS EXW

1. Why does fob costs more than exw in the freight industry?

FOB is more expensive in the freight industry because the seller “Ex Works” must put all their goods into a container and have it handled to the port.

The buyer, who pays for all this work in advance (FOB), can be sure that they will get their goods at the agreed-upon price, but they also take on all the risk.

2. Is FOB and EXW cheaper than DDP?

ExWorks is the cheapest option. Because the seller has to load the goods onto the car, this means that they will have to add their costs to it.

FOB implies that someone else does this for you which means you don’t have to pay for anything until the goods are on your land.

It can be cheaper in some cases depending on the country because FOB doesn’t include the cost of shipping the goods to your location. This saves money in many instances.

3. If I place an order after the goods have been loaded, am I still considered as FOB?

When a customer places a FOB order, the supplier loads the goods on the carrier. If the customer wants to place an order after the goods have been loaded, they are still considered as FOB.

4. What are the costs of FOB?

A buyer who pays for the goods before they are loaded will always have to pay for freight.

FOB pricing can be complicated, depending on the type of shipment and other logistics considerations, but the buyer should expect.

5. Does it matter if the freight forwarding company is FOB or EXW?

It doesn’t matter whether the freight forwarding company is FOB or EXW. It’s more about what you want from your freight forwarder, i want to make sure the product is delivered in good condition.

Conclusion

When it comes to shipping, you want your goods delivered as safely and quickly as possible. If you’re importing or exporting, FOB and EXW may be the most important terms you will ever learn.

FOB stands for Free On Board and is a term used when describing the cost of shipping items. Under this contract, the seller pays for crating and freight charges until the goods meet those requirements, then they are considered “delivered.”

EXW stands for Ex Works and is a term used when describing the cost of shipping items that doesn’t include any charge against picking up packages from a seller’s facility at time of delivery.

This means that the buyer deals with all freight charges as well as any other costs associated with getting the products want to buy.