EXW vs CIF – who pays for what?
EXW is Ex Works and CIF is Cost, Insurance and Freight. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIF, the seller also covers export clearance, transport to the port or terminal, loading for main carriage, the main freight and insurance. Under EXW, the buyer pays for this instead – except for insurance, which is not compulsory under EXW. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF applies only to sea and inland waterway transport.
- Export clearance
- EXWBuyerCIFSeller
- Transport to the port or terminal
- EXWBuyerCIFSeller
- Loading for main carriage
- EXWBuyerCIFSeller
- Main carriage (freight)
- EXWBuyerCIFSeller
- Insurance
- EXWNo obligationCIFSeller
- Risk passes
- EXWAt the seller’s premises, before loadingCIFOn board the vessel at the port of loading
- Mode of transport
- EXWAnyCIFSea only
Full cost breakdown
| Cost | EXW | CIF |
|---|---|---|
| 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 | Seller |
| 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 for freight and insurance. |
| 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.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
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 →CIF Cost, Insurance and Freight
CIF works like CFR, but the supplier also insures the goods – though only with minimum cover (Institute Cargo Clauses (C), 110% of the value of the goods), unless you agree on broader cover. The policy is usually issued by a Chinese insurer, so you would have to pursue any claim abroad. Check the scope of the policy or insure the goods in Poland.
More about CIF →When to use EXW and when to use CIF?
- 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.
- CIF – for sea freight, when the supplier arranges freight and insurance, and the policy’s minimum cover is enough for you – or you will arrange broader cover.
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 CIF?
Under CIF, the seller also covers export clearance, transport to the port or terminal, loading for main carriage, the main freight and insurance. Under EXW, the buyer pays for this instead – except for insurance, which is not compulsory under EXW. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF 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 CIF?
At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance.
Can EXW and CIF be used for rail freight from China?
Only EXW. EXW works with any mode of transport, while CIF applies only to sea and inland waterway transport. That is why CIF is not used for rail freight from China.
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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.