Ex Works (EXW) - Incoterm Explained in Hindi - YouTube

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If you want to import goods from another country

or if you want to export goods from India to another country

then it's important for you to know about Incoterms

Incoterms are the standard terms and its full form is International Commercial Terms

According to the incoterms, the delivery point for the seller is decided from where the buyer's responsibility starts

So what are the responsibilities of buyer and seller in each term

It is defined in incoterms

Ex works is a similar incoterm

In short form, it is known as EXW

In this video, we'll understand about EXW in detail

What are the exact responsibilities of a buyer and a seller

What is the delivery point where the seller delivers the cargo and the responsibility shifts from seller to buyer

And we'll also see the exact documentation that the seller hand over to the buyer

So watch this video till the end so that you don't miss any important point

Let's switch to the blackboard

In this video, let's understand EXW which is an Incoterm and its full form is Ex works

Ex works is the place from where the goods are being exported

The name of that place is written

So let's understand Ex works

Firstly, let's understand this through an example. Let's say

there is a buyer in Pune who want to import 100 invertors from China

So let's say the invertor factory is in Beijing, China and it is the seller's warehouse

So 100 invertors are to be shipped

So we'll say that China is an export country

The cargo will travel by land from Beijing to Shanghai port

After that, it will travel by ocean and its delivery is done on Mumbai port

From Mumbai, it will travel via road and reach the buyer

So we'll first understand all the steps

Then we'll see till where the responsibility is there in Ex works

In any incoterm, the responsibility, cost, and risk split is transferred to the buyer at the delivery point

So if we'll see, these 3 things are always important in any incoterm

Responsibility - Whose responsibility it would be till a point and after a point?

Cost - Who will bear the cost?

At the point the delivery is done, the cost also shifts

Risk - If any damage happens then whose risk it would be? Seller or Buyer?

So now let's see at what point the responsibility is shifted from seller to buyer in EXW

It's very simple. Ex works mean the responsibility will be transferred from the seller's warehouse or factory

So seller's responsibility is till here only

From here, the responsibility is shifted to the buyer

So what all responsibilities are there

So we've written that warehouse services are of the seller. So the seller will pack the cargo

So the export packing of the cargo is done by the seller

After that, loading would be the buyer's responsibility

Inland transportation, i.e transportation from the warehouse to port is the buyer's responsibility

The one who is handling the cargo has to give the freight forwarding fees

Has to clear the customs

Then has to pay the terminal charges and in this example, the buyer has to pay the Shanghai port charges

After that, cargo will be loaded

We are only taking the example of the ocean

Otherwise, it can travel in any form

Via air cargo, via road transportation

So Ex-works work on all the types of transportation

In this example, then it will be loaded

So if there is a ship parked on the shanghai port, then this cargo will be loaded

The responsibility of loading is on the buyer

After that, let's say the cargo reached the destination port, i.e Mumbai

Over there, the midway which is the ocean freight

The shipping charges are also to be paid by the buyer. After that,

it will be unloaded at the Mumbai port and the charges will be paid by the buyer

Then custom duties, import duties and taxes will be paid

And finally, transportation charges from the port to the factory will also be paid by the buyer

Like we saw here

From this point till the warehouse, the responsibility is on the seller

and from the warehouse, the responsibility is on the buyer

Now let's do a quick recap

The seller pack the goods as we discussed here

and make them ready in the factory or in the warehouse for pickup

Let's take an example. As we said in our previous example that if the buyer is buying 100 invertors

then how it would be written in the terms and conditions of a contract

100 invertors EX works XYZ warehouse

So the seller's factory or warehouse and the point of delivery will come here

and with that, Beijing, China

So the exact point will be mentioned where the warehouse is

After that, the buyer is responsible for transportation, cost and risk from the seller's warehouse

So the loading will also be done by the buyer

and the seller will give the documentation

So what will be the documentation?

Commercial invoice for 100 invertors

Packing list when it will be packed

The truck bill of lading which is like a receipt

So he will give the receipt of the truck bill of lading that this is much is transferred

After that, there is a wood packaging certificate

If there is cargo that is been packed on the wood pallets then the seller will provide a wood packaging certificate

After that, as we discussed that it is not the responsibility of the seller to load

But he can do the loading at the request of the buyer but the risk and cost will be of the buyer

Ex works delivery is useful when the buyer wants to cut the cost

So when the buyer would be interested in using Ex works?

When he wants to reduce the cost. Otherwise,

there is a better practical term that is FCA which is called Free Career

We'll discuss this in the next video

So when do we use the Ex works or when the buyer would be interested?

When he believes that he can handle all types of loading and shipping

So let's say if the buyer says that the cost is $ 300 per invertor

Let's say he says that the cost of one invertor is $ 3 including shipping

Ok!

So if the buyer thinks that he can handle the shipping in a better way

and the seller says that it is $ 200 without shipping

Then if the buyer can reduce the cost, maybe it would only cost him $60 for shipping

So if the buyer takes it separately, the shipping may cost only $ 60

In that case, he can save $ 40 per invertor

In this case, where the buyer believes that he can add value in shipping, can easily handle and save the money

In that case, he can use Ex works. Otherwise,

there is a practical term called FCA about which we'll discuss in the next video

In that, the loading part is also covered by the seller

and there is one more case. So in FCA, we'll see what all responsibilities are there

So do watch my next video

I tried to cover all the major points in this video

But still, if there was any point missing or you want to add something

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