problematiche vendite ex works

Selling ex works for many can be a relief, removing all forms of transportation responsibility on the goods. According to Paolo Federici, Managing Director of Fortune International Transports, the game is not worth the candle, and he tells it in his blog through a series of cases that will make you think about the hidden pitfalls in this practice.

1. You fail to get the customs export bill because the freight forwarder appointed by the client does not respond to reminders.

In case of a visit from the finance you will be forced to pay VAT plus a penalty by not being able to show a customs bill. To get a refund from the freight forwarder you will be forced to open a lengthy and costly legal case.

2. The truck bound for the port had an accident on the way and destroyed the goods.

Since the goods never arrived on board you will not be able to receive a “clean on board” bill of lading, and the foreign customer, although legally speaking he should pay for the goods, may be very reticent to do so. The letter of credit certainly will not be able to come to the rescue and will not give any kind of guarantee.

3. What about insurance?

Referring back to the previous case a further issue lies in the insurance, which will not reimburse you for the goods but the buyer. The worst case scenario could result in the customer not only not paying for the service but also receiving a refund for merchandise they never actually paid for.

For more information or to request a consultation

rischi vendite ex works

4. Letter of credit expires due to logistical delay.

If the goods arrive at the destination port late due to logistical problems and the bank’s letter of credit expires, the bank may reject the bill of lading or, in the “best” case accept it with a reservation. The latter outcome will lead to a standoff where you will not be paid until the buyer accepts the documents even with the “reservation” putting you in a vulnerable condition.

5. What if the cargo is damaged?

Referring back to the previous case, in case the cargo goes damaged, the foreign customer is unlikely to go and lift the reservation and collect the documents, consequently you will never get paid.

6. Selling ex works does not protect you from unfair competition.

If you sell ex works in a market where you are not present you may be subject to unfair competition from your customer/distributor, who may in turn resell your product in a market where you are present.

Net of these considerations, it is always important to think carefully so that you make the most appropriate choice with the least risk to your business.

For more information or to request a consultation