EXW vs FOB: who pays what

EXW is Ex Works. FOB is Free On Board. Incoterms 2020.

The difference that matters

Full cost split

Cost blockEXWFOB
Export clearanceBuyerSeller
Carriage to port / terminalBuyerSeller
Loading onto main carriageBuyerSeller
Main carriage (freight)BuyerBuyer
InsuranceNeither obligedNeither obliged
Unloading at destinationBuyerBuyer
Import clearanceBuyerBuyer
Duties and import taxesBuyerBuyer
Risk passesWhen the goods are placed at the buyer’s disposal at the seller’s premises — before anything is loaded.When the goods are loaded on board the ship.
Transport modeAny modeSea / inland waterway

What people get wrong

EXW

The buyer is formally responsible for export clearance in their supplier’s country, which they often cannot legally do. FCA usually fixes this.

FOB

Routinely misused for containers. A container is handed over at a terminal days before loading, so the seller keeps risk they think they have shed.

Questions

What is the main difference between EXW and FOB?
They split 3 cost blocks differently. export clearance falls to the buyer under EXW and the seller under FOB; carriage to port / terminal falls to the buyer under EXW and the seller under FOB; loading onto main carriage falls to the buyer under EXW and the seller under FOB.
Where does risk pass under EXW?
When the goods are placed at the buyer’s disposal at the seller’s premises — before anything is loaded.
Where does risk pass under FOB?
When the goods are loaded on board the ship.
Can EXW and FOB both be used for container shipments?
EXW works for any mode of transport. FOB is written for sea and inland waterway transport only.

Whichever term you agree, the paperwork has to say so

The Incoterm and named place belong on the commercial invoice, the packing list and the shipper's instructions — spelled the same way on each. ovrseas generates the set from one entry so they cannot disagree with each other.

Commercial invoice template

Compare other pairs

CFR vs EXWCFR vs FOBCIF vs EXWCIF vs FOBCIP vs EXWCIP vs FOBCPT vs EXWCPT vs FOB

Incoterms® is a registered trademark of the International Chamber of Commerce. This page is an independent summary of how costs and risk are allocated and is not affiliated with or endorsed by ICC. For contract drafting, use the official Incoterms® 2020 rules published by ICC.