Difference between EX Works and FOB incoterms | EX Works vs FOB

Ex works (EXW) is the incoterm where seller arranges packing of the finished goods and make those ready for loading, from that point buyer takes care of remaining activities.

In case of Ex works seller bears the cost of packing and keeps the goods ready at the loading bay, buyer bears the cost of loading, primary transportation, export clearance with duties and taxes (seller provides statutory documents and required authorization), freight, import clearance with duties and taxes, transportation at destination and unloading.

Free on board (FOB) is the incoterm where seller deliver goods on board the vessel, till that point it's seller's responsibility to arranges everything, buyer arranges freight in case of FOB.

In case of FOB seller bears the cost of packing, export clearance with duties and taxes, primary transportation and terminal handling charges. And buyer bears the cost of freight, import clearance with duties and taxes, transportation at destination and unloading.

 

In both incoterms, main similarity is the buyer arranges main carriage /freight, similarly there are few differences between these two incoterms. So let us know about the differences between Ex works & FOB.

Differences:

1. The main difference between Ex Works and FOB incoterms is Ex Works can be used for any mode of transport but FOB can be used only  for  sea and inland waterways transport.

2. In Ex Works delivery point is the loading area, seller hands over the goods to the buyer or it's agent at the loading area and all responsibilities are transferred from seller to buyer at that point,  but in FOB the delivery point is on board the vessel, seller arrange to load the goods into vessel, once vessel is on board seller's responsibilities ceases and transferred to the buyer.

3. In Ex Works seller only packs the goods and keep it ready for loading, in FOB seller does all operations at origin (loading, transportation, export clearance, terminal handling) and delivers the cargo on board vessel.

4. Post shipment documentations is the responsibility of buyer in case of Ex works but in case of FOB its seller's responsibility to arrange post shipment documentation.

Incoterms	EXW	FOB
Packaging charges	Seller	Seller
Loading charges	Buyer	Seller
Delivery to port/Place	Buyer	Seller
Export clearance, Duty & taxes	Buyer	Seller
Terminal handling (origin)	Buyer	Seller
Loading on carrier	Buyer	Seller
Freight cost (ocean/air/surface)	Buyer	Buyer
Insurance charges	Buyer	Buyer
Terminal handling (Destination)	Buyer	Buyer
Delivery at destination	Buyer	Buyer
Unloading at destination	Buyer	Buyer
Import clearance, Duty & taxes	Buyer	Buyer

 

Check below for all 11 incoterms:

EXW (Ex Works)

FCA (Free Carrier)

FAS (Free alongside ship)

FOB (Free on Board)

CFR (Cost and Freight)

CIF (Cost Insurance & Freight)

CPT (Carriage paid to)

CIP (Carriage & Insurance paid to)

DAP (Delivered at Place)

DPU (Delivered at place unloaded) – This is new incoterm introduced in 2020

DDP (Delivered duty paid)