Home / Logistics Knowledge / FOB vs EXW: Which Incoterm Should You Choose
EXW and FOB are two of the most quoted Incoterms, but they place very different responsibility on the buyer. Here is how to choose.
Under EXW (Ex Works), the seller only makes the goods available at their premises. Under FOB (Free On Board), the seller also handles inland China transport and loading the goods onto the vessel at the port of shipment. That single difference changes who arranges export and who controls the early leg.
| Factor | EXW | FOB |
|---|---|---|
| Pickup from seller | Buyer arranges | Seller handles |
| Export clearance | Buyer (or buyer's agent) | Seller |
| Inland China transport | Buyer pays | Seller pays |
| Loading on vessel | Buyer pays | Seller pays |
| Risk transfer | At seller's premises | When loaded on board vessel |
| Buyer control | Full | From main leg onward |
EXW seems cheapest because the quoted product price excludes everything. But you must arrange pickup, export declaration, and origin trucking, often through a Chinese agent you have not vetted. Those steps add cost and risk you may not control.
FOB lets the seller, who is local, handle export and loading. You take over at the port of shipment and control the main freight and destination, where you have more leverage. It is the more common starting point for China imports.
Not always, but FOB is usually safer for new importers because the seller handles export clearance and loading.
The buyer (or the buyer's appointed agent) is responsible for export clearance under EXW, which can be awkward if you have no local presence.
FOB quotes typically include origin handling and loading, so the unit price may be slightly higher, but total landed cost is often clearer.
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