EXW Damages

[SillyBill]

How would you resolve this?

EXW full truck load. Shipped to the continent. Customer advises you in an e-mail with a few images of leaking buckets/couple of soiled pallets that the lids had not been "applied properly" and they would "assess damage and inform us later of goods cost" (goods still with haulier, so not even with them). As in present us with the bill later. I took some umbrage to this on the basis it seemed the customer/haulier had already decided we were at fault (lids not applied properly, no transit damage) before the customer had even conducted a cursory investigation with receipt of goods.

My position is I obviously have no idea what has happened to those pallets since they left our site, we have no relationship with the haulier (who has a relationship with our customer) because it is EXW, only thing I do know is we obviously wouldn't load them in the condition they ended up in nor would the driver accept them. Bashing about pallets can cause lids to pop off, it happens from time-to-time for our DAP UK business, let alone international freight. For DAP business I am insured and I knowingly take the risk for the goods in transit. I don't want to be belligerent with this customer but this is expensive material where a couple of wiped pallets wipes out the profit on the rest of the load which is a lot of work done. They are a decent sized account so I don't want to be unhelpful but seems to me if I cede on this it is "cake and eat it" i.e. EXW terms but no risk for transit incidents, pass to me who has no way of defending myself because I don't know the haulier and I can't inspect the goods without great cost of recalling them damaged.

 

[MOIC]

Firstly, under EXW terms, the buyer is responsible for insurance from when the goods leaves your premises.


Did the haulage driver sign for collection in good condition? (if you offered a delivery note - I presume yes)


I would be adamant that the goods left you in good condition, however, by admitting on this forum that the lids can pop off during transit, then this can put the blame back on you.


My advice is to first wait and see what evidence they provide to see the extent of the damage, then if plausible that this happened in transit, negotiate with them. Ultimately, you may have to accept that you'll have to credit the customer for the soiled goods, given they're a decent sized customer. Maybe credit off their next order?


For future deliveries, I would ensure the following (although I'm sure you've already thought of this):


1. Ensure you have a signed document that all goods loaded were in good condition and all risks pass on to the buyer, once collected from your premises. This is normal under EXW incoterms.


2. Take photos of all buckets/pallets. Send the photos to your customer.


3. Find a way of securing the bucket lids, with clips, shrink wrap, or tape, as this may eliviate the problem.


Don't lose the customer, even if it means losing part/all your profit from this order.

 

[GraemeL]

"Firstly, under EXW terms, the buyer is responsible for insurance from when the goods leaves your premises."

Not just for insurance............

Introduction to Ex Works


Ex Works (EXW) is the Incoterms® 2020 rule used to describe the delivery of goods by the seller at their place of business, normally in their factory, offices or warehouse. The seller does not need to then load items onto a truck or ship, and the remainder of the shipment is the responsibility of the buyer (e.g. overseas shipment and customs duty). EXW is therefore more favourable to the seller as they do not need to worry about the freight once it has left their premises. However it is vital to note that once the seller has informed the buyer that the goods for the contract are identified and set aside, the delivery has been made, the buyer bears the risk from that moment and is obliged to pay, even though the goods are still in the possession and physical control of the seller.

https://www.tradefinanceglobal.com/...coterms/ex-works-exw/#Ex_works_2020RulebyRule

 

[MOIC]

I don't disagree with the above comments . . . . . . . .But, as the OP has mentioned that lids can (and have done in the past) pop off, then there has to be some responsibility on the seller to ensure the items are packaged and fit for the journey.

IMHO

 

[SillyBill]

Firstly, under EXW terms, the buyer is responsible for insurance from when the goods leaves your premises.


Did the haulage driver sign for collection in good condition? (if you offered a delivery note - I presume yes)


I would be adamant that the goods left you in good condition, however, by admitting on this forum that the lids can pop off during transit, then this can put the blame back on you.


My advice is to first wait and see what evidence they provide to see the extent of the damage, then if plausible that this happened in transit, negotiate with them. Ultimately, you may have to accept that you'll have to credit the customer for the soiled goods, given they're a decent sized customer. Maybe credit off their next order?


For future deliveries, I would ensure the following (although I'm sure you've already thought of this):


1. Ensure you have a signed document that all goods loaded were in good condition and all risks pass on to the buyer, once collected from your premises. This is normal under EXW incoterms.


2. Take photos of all buckets/pallets. Send the photos to your customer.


3. Find a way of securing the bucket lids, with clips, shrink wrap, or tape, as this may eliviate the problem.


Don't lose the customer, even if it means losing part/all your profit from this order.

TY for taking the time to reply. I think 1) and 2) are going to be implemented here, good advice.

I would also say I don't think I have admitted any liability with regards to lids coming off - if you mishandle any item you have the potential to damage it. This will happen with perfectly well packaged goods/buckets. If you force one pallet against against another pallet or up against a solid wall/barrier you can pressurise it and one of the outcomes can be dents or lids being forced off. I would not typically accept liability for that under DAP circumstances and would claim against a haulier for damages (can't do that here with it being EXW). My point was if you mishandle the goods this can and does happen. If 24 other pallets going down the same line don't have an issue then to me it suggests 2 have been bashed about. Obviously politics comes into it, I don't mind a bit of goodwill being offered on some credit to soften the blow, I am more concerned about precedents as any form of payment from me then means I am in effect accepting responsibility in transit in future for the goods once they've left my site.