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What is a pre-shipment inspection and why is it important for exporters?

A pre-shipment inspection is a mechanism used by traders to inspect products before they are shipped. Learn more about its benefits and the inspection process here.

Before a goods consignment is shipped to its destination, traders need to confirm that the products are of good quality and meet all required standards. A pre-shipment inspection, conducted by a third-party inspection company, ensures that the goods meet quality standards and adhere to the terms outlined in the purchase order or letter of credit.¹ In this blog post, we will cover what a pre-shipment inspection is, the steps involved, and its relevance for exporters.

What is a pre-shipment inspection?

A pre-shipment inspection is a quality check that is performed before a goods consignment is shipped to its destination. It is conducted when product production is at least 80% complete. The inspection assesses the functionality, performance, durability, dimensions, and overall appearance of the products.² The process offers manufacturers a chance to address and fix any issues before shipping, thereby reducing the risk of exporting defective or non-compliant products.

Steps involved in a pre-shipment inspection

Pre-shipment inspections are carried out by certified third-party agencies, in accordance with the Agreement on Pre-Shipment Inspection, introduced by the World Trade Organization in 1994.³ The essential steps involved in a pre-shipment inspection are as follows:

Site visit by inspector

The site visit is the first step of the pre-shipment inspection process. Inspections are carried out by an inspection agent at the production facility or warehouse.

Off-site shipping inspection

For commodities that require special handling (e.g., toxic substances), an off-site pre-shipment inspection may be arranged.

Quantity inspection

The inspector performs a quantity verification to ensure that the number of boxes and items is accurate. The inspector also verifies the integrity of the boxes and checks that they are being sent to the right destination.

Random sampling

To assess the quality of the entire consignment, several items are chosen at random for sampling. Most pre-shipment inspection services use the globally acknowledged statistical sampling procedure ANSI/ASQC Z1.4 (ISO 2859-1). The Acceptance Quality Limit (AQL) is used to determine the permissible number of defects in a batch before it is rejected. AQL standards differ based on the product type.

Visual checks

A visual check is conducted to identify any obvious issues, such as potential mechanical damage and production faults (e.g., missing screws or gaps between the parts).

Volumetric check

The inspection agent verifies the physical characteristics of the product to ensure they meet the client’s specifications. This includes color, weight, width, length, marks, and labeling.

Functionality test

The product is put to use to check if it works as intended. Any functional defects are identified and noted.

Safety test

A safety test includes a mechanical and an electrical component. The mechanical inspection identifies any mechanical dangers, such as sharp edges or jammed moving parts which could lead to accidents. The electrical safety test is conducted for electronic products, and usually takes place in laboratory conditions. Inspectors check for hazards, verify the certification labeling (UL, CE, BSI, CSA, etc.), and ensure that all electronic parts meet standard requirements.⁴

Why are pre-shipment inspections beneficial for exporters?

Pre-shipment inspections safeguard the interests of both exporters and importers. Exporters should get a pre-shipment inspection done for the following reasons:

1. Ensures product compliance and quality

Pre-shipment inspections confirm that the goods being exported meet desired quality standards, and adhere to legal or regulatory requirements in the destination country. A thorough inspection gives manufacturers an opportunity to address and fix any discrepancies before the shipment is dispatched

2. Reduces risk for trading partners

Pre-shipment inspections help mitigate risks associated with international trade. Importers face a lower likelihood of receiving inferior goods, while exporters and manufacturers can avoid potential reputational harm and additional costs which may arise from the shipment of defective products.

3. Enables prompt deliveries

An efficient pre-shipment inspection helps ensure timely product deliveries by preventing unexpected delays caused by non-compliant products. This allows trading partners to uphold their obligations and retain a favorable relationship with one another.⁵

A pre-shipment inspection is a valuable quality control mechanism that helps exporters deliver high-quality products and maintain positive relationships with buyers. This process is significant for e-commerce exporters shipping products to foreign markets as it helps prevent the inconvenience of additional expenses, delays, or customer complaints resulting from defective products.

For guidance on conducting pre-shipment inspections and navigating other export processes, exporters can utilize e-commerce export programs like Amazon Global Selling. Exporters on the program can leverage Amazon’s Service Provider Network, to connect with certified and reliable third-party agencies specializing in pre-shipment inspections.

Amazon Global Selling: Your passport to easy e-commerce exports

If you are a business owner and you want to sell your products to the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18 Amazon global marketplaces. As an e-commerce exports program, Amazon Global Selling provides support and guidance at every step of your export journey, connecting you to Amazon’s Service Provider Network for tailored compliance, payments, and logistics support.

Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or opt for Fulfillment by Amazon (FBA). With FBA, exporters can outsource order fulfillment to Amazon, including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.

Frequently Asked Questions

Which situations call for a pre-shipment inspection?

Inspection agencies conduct pre-shipment inspections when production is at least 80% complete. This is a manufacturer’s final opportunity to address and fix any issues before the product is shipped.⁶ A pre-shipment inspection may be requested by the manufacturer or the buyer.

What is PSI used for?

Pre-shipment inspections (PSIs) are quality control tests carried out by traders before a consignment is dispatched. It is used to ensure that the product meets all qualitative, legal, and regulatory specifications agreed upon by the trading parties.⁷

Published on March 26, 2024.

Sources:
1. https://www.hqts.com/our-services/inspections/pre-shipment-inspection/
2. https://fulfillment.shiprocket.in/blog/pre-shipment-inspection/
3. https://calcurates.com/the-pre-shipment-inspection-procedure
4. https://calcurates.com/the-pre-shipment-inspection-procedure
5. https://tetrainspection.com/pre-shipment-inspection/
6. https://www.qima.com/pre-shipment-inspection/psi-procedure#:~:text=Accredited%20inspection%20agencies%20perform%20pre,product%20against%20costly%20import%20risks
7. https://www.qima.com/pre-shipment-inspection/psi-procedure#:~:text=Accredited%20inspection%20agencies%20perform%20pre,product%20against%20costly%20import%20risks

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