Home / Guides: Chrome Supply / EXW vs FOB for Chrome Concentrate: Which Incoterm Should Buyers Use?
A practical guide for international buyers on the two most common Incoterms used in chrome concentrate supply, what each means, where risk transfers, and how to choose the right structure for your procurement model.
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Why Incoterms Matter for Chrome Buyers
Incoterms, the International Commercial Terms published by the International Chamber of Commerce, define the obligations, costs, and risks that transfer between buyer and seller in an international trade transaction. For chrome concentrate buyers sourcing from South Africa, the choice of Incoterm directly determines who manages logistics, who bears freight costs, and at what point risk transfers from supplier to buyer.
Getting the Incoterm wrong, or failing to specify one clearly, is a common source of commercial disputes and supply chain failures in commodity transactions. Understanding the difference between EXW and FOB is essential for any international buyer working with South African chrome suppliers.
What is EXW (Ex Works)?
Under EXW (Ex Works), the seller’s obligation ends at the point of collection, typically at the processing plant or storage location. The buyer is responsible for all logistics from that point: arranging transport from the plant, managing export documentation and customs clearance, coordinating port handling, and booking the shipping vessel.
EXW places maximum responsibility and maximum risk on the buyer. It is most suited to buyers with established freight forwarding relationships and strong logistics capability in South Africa, who can manage the full export chain independently and prefer to control all logistics costs directly.
What is FOB (Free on Board)?
Under FOB (Free on Board), the seller is responsible for delivering the chrome concentrate to the named port of shipment and loading it onto the vessel. Risk transfers from the seller to the buyer once the material is loaded onto the ship. The buyer is responsible for freight, insurance, and all costs from the port of loading onwards.
FOB is the more common Incoterm for chrome concentrate export transactions. It gives buyers a clear, defined handover point at the loading port, typically Richards Bay or Durban, and places logistics management for the most operationally complex stage (mine-to-port) with the supplier.
Buyer-Led FOB, The Most Common Structure
In practice, many chrome concentrate transactions are structured as buyer-led FOB, where the FOB price is agreed, but the buyer nominates their own vessel and manages freight booking independently. This gives buyers the risk transfer clarity of FOB while retaining control over shipping costs and vessel selection.
Bozorg has experience supporting buyer-led FOB transactions, coordinating the supply and mine-to-port logistics stage while the buyer manages freight from the port of loading to the destination.
Which Incoterm Should You Choose?
| Buyer Profile | Recommended Incoterm | Reason |
|---|---|---|
| Established trading company with SA freight forwarder | EXW | Full cost and logistics control from origin |
| International buyer without SA logistics relationships | FOB | Supplier manages complex mine-to-port stage |
| Buyer who nominates own vessel but wants supply certainty | Buyer-led FOB | Risk clarity plus logistics handover at port |
| First-time South African chrome buyer | FOB | Reduces logistics complexity; simpler risk management |
FAQs: Incoterms for Chrome Concentrate
Everything you need to know
What is the most common Incoterm used in South African chrome concentrate exports?
FOB (Free on Board) is the most common Incoterm for South African chrome concentrate export transactions, with buyer-led FOB arrangements, where the buyer nominates their own vessel, being widely used among established international trading companies.
Under EXW, who is responsible for South African export customs clearance?
Under EXW, the buyer is responsible for all export formalities, including South African export customs clearance. This requires either a South African freight forwarder or customs agent acting on the buyer’s behalf.
Does Bozorg support both EXW and FOB transactions?
Yes. Bozorg has experience supporting both EXW and buyer-led FOB transaction structures, accommodating buyers who manage their own freight and logistics arrangements as well as those who require mine-to-port coordination.