EXW vs CFR – who pays for what?
EXW is Ex Works and CFR is Cost and Freight. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CFR, the seller also covers export clearance, transport to the port or terminal, loading for main carriage and the main freight. Under EXW, the buyer pays for this instead. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CFR applies only to sea and inland waterway transport.
- Export clearance
- EXWBuyerCFRSeller
- Transport to the port or terminal
- EXWBuyerCFRSeller
- Loading for main carriage
- EXWBuyerCFRSeller
- Main carriage (freight)
- EXWBuyerCFRSeller
- Risk passes
- EXWAt the seller’s premises, before loadingCFROn board the vessel at the port of loading
- Mode of transport
- EXWAnyCFRSea only
Full cost breakdown
| Cost | EXW | CFR |
|---|---|---|
| Export clearance | Buyer | Seller |
| Transport to the port or terminal | Buyer | Seller |
| Loading for main carriage | Buyer | Seller |
| Main carriage (freight) | Buyer | Seller |
| Insurance | No obligation | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | At the seller’s premises (or another agreed place), when the goods are ready for collection – before loading. | At the port of loading, when the goods are on board the vessel – even though the seller pays the freight to the port of destination. |
| Mode of transport | Any mode of transport (sea, rail, air, road) | Sea and inland waterway transport only |
Notes
- EXW – export clearance: formally the buyer’s responsibility. In practice, the export declaration in China is filed by the supplier or a Chinese customs broker, because a foreign buyer is not registered with customs there.
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
What to watch for when importing from China
EXW Ex Works
Once the goods are ready for collection, everything else is your responsibility – including loading and export clearance. In China, the export declaration is filed by a company registered with Chinese customs – usually the supplier or a Chinese customs broker – so you will need their help anyway. Agree in writing who loads the goods and who handles export clearance. If the goods are damaged during loading, the loss is yours.
More about EXW →CFR Cost and Freight
The supplier pays the freight, but the risk passes to you as early as the port of loading in China. You usually pay the charges at the port of destination (e.g. for container handling at the terminal and the release of documents), and they are set by the forwarder chosen by the supplier – you do not know them in advance. Before you place the order, ask for a list of these charges.
When to use EXW and when to use CFR?
- EXW – when you want to control transport right from the factory, and your freight forwarder arranges collection of the goods and export clearance in China.
- CFR – for sea freight, when the supplier has a good freight rate to Europe, while you insure the goods yourself and handle customs clearance in Poland.
Buying on EXW terms? You choose the forwarder
We organise transport from China – by rail, sea or air – together with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between EXW and CFR?
Under CFR, the seller also covers export clearance, transport to the port or terminal, loading for main carriage and the main freight. Under EXW, the buyer pays for this instead. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CFR applies only to sea and inland waterway transport.
Where does risk pass to the buyer under EXW?
At the seller’s premises (or another agreed place), when the goods are ready for collection – before loading.
Where does risk pass to the buyer under CFR?
At the port of loading, when the goods are on board the vessel – even though the seller pays the freight to the port of destination.
Can EXW and CFR be used for rail freight from China?
Only EXW. EXW works with any mode of transport, while CFR applies only to sea and inland waterway transport. That is why CFR is not used for rail freight from China.
Compare other pairs
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.