In a shipment on EXW terms – Who should pay for securing the cargo in the container..?? This is a question posed by a reader as below..
Here is my question :
– cargo (wine in cartons, on pallets) will be exported from France to the USA
– the term of sale is EXW
– the exporter will load and seal the 40′ dry container
The exporter is requested to load the 40′ dry container at 19000 kgs by his client.
19000 kgs are OK on French & American roads, and are OK for marine transportation in a 40′ dry.
However, the exporter needs to arrange the cartons on high pallets in order to maximize space in the 40′ dry container and in such a way that :
1- pallets may fall down
2- it gets dangerous at time of devanning the container in the USA
3- cartons may be damaged, bottles may be crushed.
Therefore it was advised to exporter to use airbags & safety nets in order to prevent the pallets from moving, falling, being dangerous …
The exporters says this is the Freight Forwarder’s duty to arrange the safety of the load.
The Freight Forwarders will NOT load the container ; only the exporter will.
Is the Freight Forwarder really responsible for :
– providing airbags & safety nets ?
– the way a container is loaded by another party, e.g. the exporter in this situation ?
Many thanks in advance,
Robertson’s Cargo Consultancy’s – Alexander Robertson is this blog’s consulting expert on International Trade, and he responds as below :
Under EXW it is the duty of the seller to make the cargo available to the buyer at the agreed point. It is not the duty of the seller to load the cargo into any container. That would be FCA. Any cargo which is loaded into a container needs to be made secure to prevent the cargo from moving.
It is noted that the Freight Forwarder not be loading the container. Who has appointed the freight forwarder? Any items used for the securing of the cargo within the container will be part of the costs of loading and should be borne by the party carrying out the function. Has the seller charged the buyer for the loading of the container?
From what I see this is not a true EXW but more of a FCA situation.
EXW is not a very suitable rule for international trade as there are functions which the buyer has to perform in the foreign country which are better carried out by the seller, these also including the documentation which the seller may require to comply with local legislations.
To answer the question on who should provide the netting and airbags, this should be supplied and paid for by the person responsible for the loading of the container. Obviously no seller is going to do this for free and these costs will be forwarded to the buyer.
Trust that this answers the question.
Robertson’s Cargo Consultancy (Pty.) Limited
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To read more about EXW and other Incoterms® 2010 read previous articles published on this blog :
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i think with Ex – work all expenses be paid by buyer , i hop that is right
On EXW basis the Cargoshipper is only obliged to set the cargo availiable for pickup at his premises. On these terms he does not initiate the transportation of the cargo, he only expects the cargo to be picked up. This sales basis is very rare in export/import relations. On FCA terms, more specific for such kind of deals, the Cargoshipper should provide the necessary conditions for the safe transportation of the cago, but still he can dispute these if these conditions and cago securing are not usual for him (for example he uses other and easier cargo securing when shipping by direct trucks to the UK or Ireland or Russia etc on same FCA terms). It is better that the initiator of the commercial deal covers these costs. A surveyour consultant is recommended to be present during the first loading. Then after the first loading both parties should receive and study the report of the surveryour consultant and agree who should bear the costs for next shipments.
When terms of sale is EXW and supplier is packing the ccontainer and extra charges for securing material is required ,by all means the supplier needs to advise the buyer and add this onto his commercial invoice either stipulate this on the invoice or prorata the safety packaging by the total number of units.Supplier should always advise his client on this.