EXW and FCA — Minimum Seller Obligations
EXW — Ex Works (Named Place of Delivery)
Risk Transfer: At the seller's premises (factory, warehouse)
Seller's Obligations (MINIMUM):
- Pack and label the goods
- Make goods available at named place
- Provide commercial invoice
Buyer's Obligations (MAXIMUM):
- All export clearance and export duties
- Loading at seller's premises
- All freight (origin handling, sea freight, destination)
- All import clearance, import duties, delivery
When to Use: When the buyer has strong logistics capabilities and wants full control. The seller's risk and obligation ends the moment the goods are ready for collection.
Caution for Sellers: EXW provides the least protection for the seller's ability to obtain an LC payment, because the seller cannot easily obtain a "clean on board" Bill of Lading required by most LCs.
FCA — Free Carrier (Named Place of Delivery)
Risk Transfer: When goods are delivered to the carrier nominated by the buyer, at the named place
Two Scenarios:
- Named place = Seller's premises: Risk transfers when goods are loaded onto the buyer's collecting vehicle
- Named place = Another location (e.g., a freight terminal): Risk transfers when goods are delivered to the carrier at that location, ready for unloading
Incoterms 2020 Change — FCA with On Board B/L:
A significant addition in Incoterms 2020: the buyer and seller can agree that the buyer will instruct their carrier to issue an "on board" Bill of Lading to the seller after loading. This allows sellers using FCA to still obtain the clean on board B/L required by LCs.
Export Clearance: Seller's responsibility (unlike EXW)
Why FCA is Preferred Over EXW for Most Sellers: The seller handles export clearance (which is easier in the seller's country) but risk transfers early.