Manufacturer's Requirement to Issue an Electronic Delivery Guarantee under EXW Terms and Risk Analysis A Practical Approach

Whether Manufacturers Need to Issue a Telex Release Guarantee under EXW Terms and Risk Analysis

I. Introduction

With the continuous development of international trade, more and more transactions are conducted under EXW Ex Works terms. EXW, or factory delivery, is an international trade term indicating that the seller delivers the goods at a specified location, usually their factory or warehouse, and the buyer assumes all risks and costs associated with the goods from that point onward. However, whether manufacturers need to issue a telex release guarantee TRG under EXW terms has become a topic of increasing concern. This article will analyze this issue in light of recent news and provide appropriate references to relevant reports.

II. Do Manufacturers Need to Issue a Telex Release Guarantee?

Generally speaking, manufacturers are not required to issue a telex release guarantee under EXW terms. Under these terms, the risk of loss or damage to the goods transfers to the buyer once the goods are made available at the seller’s premises. The seller is only responsible for providing basic shipping documents. However, in certain special circumstances-such as when the buyer delays payment or the goods are detained by customs-the manufacturer may need to issue a TRG to mitigate potential losses.

III. Risk Analysis

1. Cargo Security Risks

If a manufacturer issues a TRG, the safety of the cargo becomes entirely dependent on the carrier's responsibility and reputation. Should the carrier fail to fulfill its obligations, resulting in cargo loss or damage, the manufacturer could suffer significant financial consequences.

2. Legal Risks

By issuing a TRG, the manufacturer must ensure compliance with relevant laws and regulations to maintain the validity and legality of the document. Failure to do so may result in legal disputes, fines, or other liabilities.

3. Credit Risks

Issuing a TRG may exacerbate credit risks if the buyer defaults on payments or fails to meet contractual obligations. It is essential for manufacturers to assess the buyer’s creditworthiness and clearly define payment methods and timelines in the contract.

4. Operational Risks

When issuing a TRG, manufacturers must also consider operational risks such as cargo tracking and receipt confirmation. Close coordination with the carrier is crucial to ensure smooth logistics operations.

IV. Conclusion

In conclusion, whether a manufacturer should issue a telex release guarantee under EXW terms depends on the specific circumstances of each transaction. Sellers should carefully weigh the associated risks and implement appropriate risk management strategies. Additionally, strengthening cooperation with reliable carriers and logistics partners is vital to ensuring cargo safety and legal compliance. To further reduce exposure, manufacturers may consider partnering with reputable insurance companies for additional protection. This analysis aims to provide clarity on whether issuing a TRG is necessary under EXW terms and the potential risks involved. We hope it offers valuable insights for your business decisions.