Exam L4M4 Topic 1 Question 146 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 146
Topic #: 1
A buyer has been tasked with placing an order for steel from another country and using Incoterms for delivery. The buyer's organisation has an in-house transportation and export clearance department. During negotiations, the buyer achieved a 25% cost reduction by accepting responsibility for loading, transportation, and export clearance. Which Incoterm has been agreed?

Suggested Answer: A Vote an answer

The EXW (Ex Works) term means the seller's responsibility ends once goods are made available at their premises. The buyer must take on costs and risks from that point, including loading, transport, and export clearance. Because the seller is not responsible for logistics, the quoted price is lower. In contrast, FCA includes delivery to a carrier, FOB covers loading onto a vessel, and CIP includes carriage and insurance arranged by the seller. By accepting these responsibilities, the buyer leveraged cost savings, demonstrating knowledge of Incoterms and alignment with efficient sourcing practices.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - Incoterms responsibilities and cost-sharing.

by Robin at May 06, 2026, 01:27 PM

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