ma107244915 Level 1 asked 2009-08-11

What is the difference between FOB prices and Ex works price... 0

Question Category: Insurance Views: 7178

[em19][em19]What is the difference between FOB prices and Ex works prices.

Thank you

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  • uwebrunjes 2009-08-11 Best Answer

    Ex works (EXW) means that you have to pick up the merchandise at the factory. On the other hand, "Free On Board" ("FOB"... plus more details)  means that it will be loaded on to a carrier at the specified location.

    So "FOB factory" would almost be the same as "EXW", as only the loading process itself would cause a difference in price. In either case you pay the transport. But if for example the factory is far inside the country, then "FOB Seaport" would be quite different from "EXW", as the FOB priced would inlude the shipping to the port plus loading it on the ship ("FOB" stands for "free on board").

    You might want to do the math to see what suits you best, but in practice it often isn't worth the trouble getting involved too much with transportation. If ocean transport is involved, for a newcomer it's typically the best to ask for FOB pricing and even ask them to find a suitable shipper for you.

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    • posnol 2009-11-11



      Hi![em17] My dear friend,

      EXW – Ex Works

      The seller makes the goods available at his premises. The buyer is responsible for all charges.



      This term may be the easiest to administer, however may not be in the seller's best interests. There is no control over the final destination of the goods. It may be possible for the seller to negotiate better freight rates than the buyer. A vehicle arriving to take delivery of the seller's goods under EXW may not be suitable for carriage





      FOB – Free on board (named loading port)



      The classic maritime trade term. The seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. Maritime transport only. It also includes Air transport when the seller is not able to export the goods on the schedule time mentioned in the letter of credit. In this case the seller allows a deduction of sum equivalent to the carriage by ship from the air carriage.



      THanks.[em20]
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    • czchaoli 2009-10-14

      FOB is better for the suppliers, isn't it?
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    • jessicamu 2009-11-01

      EXW price means the buyer pick up the goods in the seller's warehouse. Buyer will bear the following fees as below.
      -all the handling fees exporting from China, such as declare custom, load container, domestic transportation in China, and others.
      -ocean freight
      -importing handling fees.

      FOB price means the sellers is responsible the handling fees exporting from China, and delivery the goods into the warehouse of the forwarder.

      Hope it is useful for you. Good luck

      Jessica
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    • in1001741465 2012-02-27

      price terms; FOB DALIAN TO INDIAN PRICE

       

       

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    • cn200040081 2009-11-11

      [em1] learning ,tks
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    • pk107634433 2009-11-10

      Hi![em17] My dear friend,

      EXW – Ex Works

      The seller makes the goods available at his premises. The buyer is responsible for all charges.

       

      This term may be the easiest to administer, however may not be in the seller's best interests. There is no control over the final destination of the goods. It may be possible for the seller to negotiate better freight rates than the buyer. A vehicle arriving to take delivery of the seller's goods under EXW may not be suitable for carriage

       

       

      FOB – Free on board (named loading port)

       

      The classic maritime trade term. The seller must load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. Maritime transport only. It also includes Air transport when the seller is not able to export the goods on the schedule time mentioned in the letter of credit. In this case the seller allows a deduction of sum equivalent to the carriage by ship from the air carriage.

       

      THanks.[em20]

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    • ca105713514 2009-09-28

      The explanation is all over the internet.  Until you understand incoterms, it's not really useful to even start the
      buying or selling process.  It will come up at the first opportunity and if you do not understand, then you
      will not look very professional or be able to discuss the sale.
      Download the pdf on Incoterms at this site :  http://www.secondreview.ca/logistics/incoterms.html
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    • xtjc 2009-08-12

      Exactly! Be careful of the FOB terms especially when you do business with American clients. Don't forget to consider the ocean freight and insurance rate while quoting in this case.
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    • au101221417 2009-08-11

      Also, be aware that if you are dealing with Americans, they often use FOB for all levels of sale.

      In other words your customer might ask for a price FOB New York when actually they mean CIF New York, but they don't understand that they mean this

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