The cost and risk factors must be understood by exporters, as the terms are binding. Each Incoterm must always be qualified by a named place or port. When selling EXW, the exporter is required to mark and package the goods and place them at the disposal of the importer at a named place in the exporter's country. This place is usually the exporter's warehouse. The importer must pay and arrange for pre-shipment inspections, customs formalities, port charges and other official charges.
All transport costs from the named point are for the importer's account.
The importer bears all risks from the time the goods are placed at his disposal at the named point. As this is essentially your export price, you must build in all the costs involved in the transaction, such as, bank charges, credit risk insurance, commissions due to local or international agents etc. There are a group of incoterms exclusive to seafreight and inland waterways. FOB is a well known term in exports. It is a convenient delivery term to quote when making product offers, because the goods are costed on board ship in port of loading closest to the exporter.