Ex Works now defunct?

“Ex Works” is still a widely used Incoterms rule, honoured by custom and practice.  However in today’s regulatory environment it is hardly ever appropriate for cross-border transactions.

This is the only rule that requires the buyer, and not the seller, to undertake export clearance.

However under most jurisdictions this is simply not safe or practical.

Beyond this, this rule poses other danger.   If there are exclusive distribution arrangements for certain markets, the exporter needs to be sure that goods will not find their way back onto these, upsetting existing business relationships.

So for cross-border transactions, the obvious alternative
is Free Carrier (seller’s warehouse)

One legitimate use for Ex Works in cross-border transactions may be for issuing of quotations – i.e. the cost of the goods without any “extras”.

One caution here – the rule requires the seller to provide packaging for the goods, and when the quotation is issued, the transport mode may not have been decided.   This may affect the type of packaging needed, and so the total transaction cost.

For domestic transactions, Ex Works still has a place, but there are still some drawbacks

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