EXW vs FCA: Which Incoterm is Best for Commodity Sellers?

EXW is the Incoterm with minimum responsibility for the seller: the buyer picks up goods at the seller's premises (factory, warehouse, mine). The buyer handles everything: loading onto the collection vehicle, inland transport, export clearance, shipping, insurance, and import clearance. The seller simply makes the goods available at their location.

In commodity trading, EXW is used primarily for domestic transactions or when the buyer has their own logistics infrastructure at the origin. For international trade, EXW creates problems because the seller cannot clear goods for export (a legal requirement in most countries), making the term impractical for cross-border commodity transactions.

FCA means the seller delivers goods to a carrier or other person nominated by the buyer, either at the seller's premises or at another named place. If delivery is at the seller's premises, the seller loads; if at another place (e.g., a container terminal), the seller delivers to the carrier unloaded. The seller handles export clearance.

FCA is increasingly recommended for containerized commodity trades as an alternative to FOB. Under Incoterms 2020, FCA includes an important option: the buyer can instruct the carrier to issue a bill of lading to the seller, solving the common problem of sellers needing bills of lading for letter of credit presentations before the vessel sails.

For most commodity sellers, FCA is preferable to EXW because it allows the seller to handle export clearance (which they're legally required to do anyway) and provides clearer delivery and risk transfer points. FCA works for both containerized and bulk cargo.

Use EXW only for domestic sales or when the buyer specifically requests it and has the logistics capability to handle collection and export clearance. For any international commodity transaction, FCA is more practical and reduces legal complications around export responsibilities.