A win-win option for reducing costs

Ex-works without pickup

If you and your supplier can agree on an ex-works without pickup (that she delivers your goods to the origin warehouse) then you can reduce the overall transport cost, thus making your purchase cheaper and the prices of the supplier more competitive.

In short, Ex-works without pickup is just an Ex-works shipment, where the supplier delivers the cargo to the warehouse instead of the buyer’s forwarder picking it up. It basically just means that instead of the buyer paying all 7 steps of the international shipping process, then the supplier takes care of the very first step and the buyer then pays for the remaining 6 steps.

Ex-works without pickup is simply an Ex-works variation

98% of the import shipments ordered on Transporteca are either FOB or EXW. The last 2% is a variation of the EXW term that we internally in Transporteca has dubbed ‘Ex-works without pickup’. This variation of the EXW term does not have an official INCO-term (read about INCO terms here) and it therefore has different names depending on whom you ask (so do the official INCO terms, by the way). You may hear people call it ‘Ex-works from port’ or ‘Ex-works from warehouse’. It is all the same thing.

It is a fact, though, that many more can benefit from using this variation.

The 7 steps of the international shipping process

The concept of Ex-works without pickup is quite simple, but if you are not used to the terminology then it is a good idea to revisit our guide on The 7 steps of the international shipping process.

Ex-works without pickup

The 7 steps are:

1.Export haulage
2.Export customs clearance
3.Origin handling
4.Freight – Could be by road, rail, sea, air or a combination of those
5.Destination handling
6.Import customs clearance
7.Import haulage

When you import on FOB terms you pay steps 4-7. The shipper pays 1-3.

When you import on Ex-works terms you pay steps 1-7. The shipper pays nothing.

When you import on Ex-works without pickup terms you pay steps 2-7. The shipper pays step 1.

Why is this a win-win?

Your shipper – let’s say she is in China – can often quite easily arrange the transport of your cargo – let’s say it is a pallet of machine parts – from her factory (which usually is in the outskirts of the city) to the forwarders warehouse (which usually is in the port area). She may have other cargo going to the same area, so the extra transport only comes at a small incremental cost. If you – as buyer of the goods – have to arrange the same transport, then you have to pay your forwarder for this, who has to pay his overseas agent – in this case in China – who again has to hire a trucking company to do it. This creates three layers of coordination and therefore three layers of cost, rather than just one (when the shipper arranges it directly).  Moreover, a truck arranged by your forwarder will often need to take a relatively long trip to make the pickups as they are scattered throughout a large part of the city, whereas a truck arranged by the supplier can go directly from the factory to the warehouse, full of cargo to many different buyers.

Who pays shipper for arranging this?

You do.

The shipper will usually charge you a fee for arranging this, as he either needs to pay for having his own driver and truck employed or he needs to hire a local trucking company to do it.

Ex-works without pickup

The fee he charges will in most cases be far less than what you can buy the pickup for through your forwarder. In essence, you may pay the shipper USD 100 and in return save USD 200 on the bill from your forwarder.

How to order Ex-works without pickup

First, ask your shipper if he is able to arrange delivery to the warehouse. If this is doable, then ask your forwarder for a price on Ex-works without pickup terms.

When looking for import prices on Transporteca’s portal, the default option is FOB terms. On the search result page you can easily change the trading terms to EXW or Ex-Works without pickup. Click ‘show advanced options’ to select the Ex-works without pickup solution.

Should you have any questions regarding Ex-works without pickup, or how to navigate between the different trading terms on the portal, please feel free to get in touch via our chat or by email.