Meaning
Final logistics phase where finished goods depart the manufacturing facility marks the completion of the production cycle and the start of the transport process. During a factory exit execution, the supplier releases the packaged cargo to the nominated freight forwarder or carrier. This transition requires the verification of export documentation, loading lists, and quality clearance certificates.
The physical departure from the loading bay constitutes the official handoff point where responsibilities can shift under the agreed sales terms.
Operational Clearance
Release of the inventory from the warehouse depends on the completion of the internal quality checks and the receipt of the final payment. Before a factory exit execution can occur, the quality control department must issue a release note confirming the batch matches the purchase order specifications. The warehouse staff then generates the commercial invoice and packing list.
These documents are compiled for customs declaration at the port of departure.
Logistical Coordination
Positioning of the containers at the loading dock must be scheduled to avoid port congestion or container detention charges. In a typical factory exit execution, the buyer’s logistics agent arranges the trucking service to match the production schedule. The driver must present a valid container release order at the factory gate.
Ground crews then load the cartons or pallets into the container under supervision to prevent damage. Proper container sealing and weight verification must happen before the truck departs, ensuring compliance with international maritime security standards and local transport regulations.
Risk Allocation
Transfer of risk between the manufacturing seller and the foreign buyer is governed by the selected Incoterm in the contract. Under Ex Works conditions, the factory exit execution shifts all subsequent risks to the buyer once the goods are placed at their disposal. In contrast, Free on Board terms require the seller to manage the loading and harbor transport.
This distinction determines who bears the financial burden if the cargo is damaged during the exit phase.
