"EXW Delivered" to serve China Trade Practice

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10 April 2009

To: Prof. Charles Debattista

Dear Professor,
Many L/Cs in China trade call for a cargo receipt or Forwarder's Cargo Receipt (FCR), particularly those ordered by conglomerates such as Wal-Mart, JC Penney, Brookstone etc. They have nominated forwarders in Hong Kong to receive the goods on their behalf and ship the goods from many suppliers under consolidation, as the case may be.
A supplier only has to deliver the goods to the nominated forwarder and the job is done. The supplier then presents the FCR for payment under mostly house or private label L/C.
Since the supplier need not load the goods on the ship or aircraft, FOB or FCA is not suitable.
EXW is nearer but not exactly fit because under A4 the obligation of the seller is to prepare the goods ready for buyer's disposal or ready for the buyer to send their forwarder to pick them up from the supplier's warehouse, not even loaded on the truck. However this is seldom the case in China trade. In my experience serving the suppliers to JC Penney, Brookstone etc., the seller must deliver the goods to the forwarder's place, depot or warehouse in exchange of a FCR. In that case a new Incoterms 2000 Variant has to be made, would I call it "EXW Delivered" where the seller need to deliver the goods to the buyer or buyer's nominated forwarder.
Hence to cover this popular trade practice in China trade, I think the Incoterms 3000 has to add a new Incoterm "EXW Delivered" to reflect such trade practice.
It is also important to pinpoint the obligation - who is going to unload the goods from the truck on arrival? In China trade, it depends, but usually the buyer's forwarder who should have the forklift trucks ready, would do the unloading.
Best regards,
T. O.

This document is the 2nd episode of on Incoterms 3000.

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