Two flooring quotations can show the same product at different prices simply because they are quoted on different trade terms. EXW and FOB are the two terms importers meet most often at the start, and they split the work of getting a container from factory to ship very differently. This guide explains what each term means under Incoterms 2020 and what to confirm before the first booking.
What Incoterms do, and what they do not
Incoterms are rules published by the International Chamber of Commerce (ICC). The current edition is Incoterms 2020. Each rule defines three things between seller and buyer:
- Delivery: the point where the seller has done its job of delivering the goods.
- Risk: the point where risk of loss or damage passes to the buyer.
- Costs and tasks: who pays for and arranges each step, such as loading, export clearance and transport.
Incoterms do not decide the price, the payment terms, the transfer of ownership or what happens if the goods are wrong. Those belong in the sales contract. A term should always be written with its named place and the edition, for example “FOB [named port of shipment] Incoterms 2020”.
EXW: Ex Works
Under EXW, the seller makes the goods available at its own premises, or another named place, packed and ready for collection. That is where delivery happens, and from that moment the buyer bears the risk and cost.
What the buyer takes on under EXW
- Loading the goods onto the collecting vehicle or container. Under the rule, the seller has no obligation to load.
- Export clearance in the country of origin. The seller must assist with information, but the buyer, usually through its forwarder, is responsible for completing it.
- Inland haulage from the factory to the port.
- Terminal handling, ocean freight, insurance and everything after that.
Where EXW can create friction
- Loading. In practice the factory often loads the container at its dock, because its staff and equipment are there. Under strict EXW that loading is at the buyer’s risk. Agree in writing who loads and who is responsible if something is damaged during loading.
- Export clearance. The buyer’s forwarder has to handle a formality in the seller’s country. This works when the forwarder has a local agent who can do it, and is harder when it does not.
- Documents. Export records are in the name of whoever cleared the goods, which matters for your own records and any later queries.
EXW gives the buyer the most control over the shipment and the most responsibility for it.
FOB: Free On Board
Under FOB, the seller delivers the goods on board the vessel nominated by the buyer, at the named port of shipment. Risk passes to the buyer once the goods are on board.
What the seller takes on under FOB
- Packing and loading at the factory.
- Inland haulage to the port of shipment.
- Export clearance in the country of origin.
- Delivery on board the vessel the buyer has nominated.
What the buyer takes on under FOB
- Nominating the vessel, usually through its forwarder, and telling the seller in time.
- Ocean freight and insurance.
- Everything from the moment the goods are on board, including destination charges and import clearance.
A note on FOB and containers
FOB is designed for sea and inland waterway transport where goods are placed on board. ICC guidance notes that containerized goods are often handed over at a terminal before loading, and for that situation it suggests FCA (Free Carrier) as a better fit, since the seller loses physical control of the container before it reaches the ship. Many flooring buyers still use FOB. If you do, be clear with your supplier and forwarder about when and where the container is handed over.
Side-by-side comparison
| Task or point | EXW | FOB |
|---|---|---|
| Delivery point | Seller’s premises or named place | On board the vessel at the named port |
| Risk transfers | When goods are made available | When goods are on board |
| Loading at the factory | Buyer (unless agreed otherwise) | Seller |
| Inland haulage to port | Buyer | Seller |
| Export clearance | Buyer | Seller |
| Vessel booking | Buyer | Buyer nominates |
| Ocean freight and insurance | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
What to confirm for a flooring container
Whatever the term, flooring has a few details that are easy to leave until too late.
Packing and pallets
- Carton format and the quantity per carton, stated in sq ft.
- Whether cartons ship on pallets or floor loaded, and the pallet build.
- Wrapping and corner protection on pallets.
- Whether your destination has rules for wood packaging material, such as treated and marked pallets. Confirm with your forwarder.
Labeling
- What each carton label shows: product description, color code, dimensions, lot, carton count.
- Whether a private-label program needs your brand and your barcodes on the carton.
- Any compliance statement required for your market, such as a CARB Phase 2 statement for engineered products entering the U.S. market.
Loading and handover
- Who loads the container, and who is responsible for damage during loading.
- Who declares the verified gross mass of the container before it goes on board.
- Who arranges the container seal and records the seal number.
- The exact named place (for EXW) or named port of shipment (for FOB).
Documents
- Commercial invoice and packing list, matched carton for carton.
- The documents your forwarder and customs broker need, and who issues each one.
Questions to ask your supplier
- Which Incoterm and edition does the quotation use, and what is the named place?
- Does the quoted price include loading at the factory?
- Who handles export clearance, and in whose name?
- How are cartons packed, palletized and labeled?
- When will the goods be ready for collection or on board, and how will that date be confirmed?
Choosing between them
EXW suits buyers with a forwarder that has strong local reach and who want to control every step. FOB suits buyers who prefer the supplier to handle origin tasks and export formalities while they control the ocean leg. Neither is right for every order. What matters is that both sides read the same term the same way, and that the contract names the place. Our RFQ checklist shows where to state your preferred term in the first request, and the order process article explains the steps before a container is packed.
Working with Vu Uy Wood
Vu Uy Wood manufactures solid and engineered French White Oak flooring to specification in Song Than 3 Industrial Park, Ho Chi Minh City. Our order process ends with packing and shipping: carton count, labeling and pallet build, then the container. When you request a quotation through the contact page, include your delivery address or port and your preferred trade term, and the quotation will state the term it is based on.