The difference between EXW and FOB and the costs you need to bear as a seller

The full name of EXW is EX-works, which means that the ex-works price is usually expressed as EXW+ delivery location, usually a factory or warehouse.

Under the EXW terms, when the goods are handed over to the buyer from the designated delivery location, the ownership of the goods and risk is passed on to the buyer at the same time. For exporters, EXW is the least liability and risk of all trade terms. Although it is said to be ex-works, it does not mean that we can prepare the goods. In actual operation, we also need to cooperate with the transportation of goods, customs clearance and other procedures. Before shipment, the freight forwarder will contact the seller after receiving the customer's freight entrustment. At this time, the seller needs to fill in a booking (booking form) to the freight forwarder according to the actual situation of the goods, and then the freight forwarder will arrange subsequent shipments according to the booking. In the case of EXW, we do not need to pay any fees for work, such as ordering a car to pick up the goods at the warehouse designated by the seller. The full name of FOBFOB is FREE ON BOARD, which refers to the delivery on board at the port of shipment. It used to be commonly known as FOB price. It is usually expressed as FOB + port of departure. Under the terms of FOB, the seller is responsible for transporting the goods to the wharf and performing customs declaration. Risk and responsibility have the goods on board. The moment it is handed over to the buyer is simply that all costs before the goods are shipped should be borne by the seller, including trailers, customs declarations, local fees and other costs. In the case of FOB, the local cost can refer to the following bill. It should be noted that if we do not entrust the freight forwarder to arrange trailers and customs declaration, the above costs will not be reflected in the freight forwarder's bill. In fact, the categories of charges are similar, but for different shipowners, the charges will be different.

Note: For bulk cargo entering the warehouse, you need to ask a truck to arrange the goods to be delivered to the designated warehouse of the freight forwarder, which will result in the cost of asking for the fare to send the warehouse, the cost of the vehicle through the high-speed, the cost of entering the warehouse, etc. If you use the cargo to pull the goods to the warehouse In this case, the cost of the time the driver spends waiting at the freight forwarding warehouse also needs to be taken into account. These charges will not be reflected in the forwarder's bill. Pay attention to the bill of bulk freight charges, some charges are charged according to the number of bills of lading, and some are charged according to the weight/volume of the cargo. When declaring bulk cargo FOB, you need to take into account the actual size and weight of the goods, and make an estimate. For different freight forwarders, the charges will also vary. You can see the above two bills, the same is to the Karachi port in Pakistan, the charges are also different.

Summary: Generally speaking, the FOB of the whole cabinet is operated by long-term cooperative trailer companies and customs brokers, so the cost will be relatively fixed. However, for the bill of freight forwarding, the charges of different shipping companies are also different. For the FOB of bulk cargo, the customs declaration needs to be arranged by the freight forwarder designated by the buyer, so all the charges may be higher than those of the companies we cooperate with. Therefore, whether it is the cost of container cargo or bulk cargo FOB, we should try to reserve some space as much as possible. How to calculate the FOB price of a product? It is generally divided into two types to estimate the approximate value of a container or a shipment, and then spread the FOB cost evenly on the price of each product. 2. Directly tell the customer how much the FOB fee needs to be added to operate a container or a single shipment in the case of FOB.